Counterparties: Europe’s longest recession
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Europe is in the midst of its longest recession since it began keeping records in 1995 — even surpassing the calamity that hit the region in the financial crisis of 2008-2009. While the German economy grew 0.1% from the fourth quarter of 2012 to the first quarter of this year, just about everyone else in the eurozone is shrinking.
France’s economy shrank 0.2% quarter on quarter, and is now officially back in recession after just one quarter of positive growth. It’s not alone: Cyprus, Finland, Italy, Greece, the Netherlands, Portugal, and Spain are all in recession right now. And while the UK managed to just barely avoid a triple-dip recession by growing 0.3% in the first quarter, its economy is still 2.6% smaller than it was 5 years ago.
Yesterday, Pew’s latest eurozone survey confirmed that the continent’s sentiment matches its dour economic data. The survey’s disconcerting conclusion:
The European Union is the new sick man of Europe. The effort over the past half century to create a more united Europe is now the principal casualty of the euro crisis… The prolonged economic crisis has created centrifugal forces that are pulling European public opinion apart, separating the French from the Germans and the Germans from everyone else.
Median support for the EU stands at 45%, down 15 percentage points in just the last year. Across the eight surveyed countries, only 26% think the economic integration has strengthened their national economy, a 6 point decline from last year.
The data shows that as Europe’s division and disillusion grows, a familiar, and politically worrying, trend is emerging. Joshua Tucker says that the Germans aren’t just living, as Pew puts it, on another continent, they “appear to be living on a different planet.” 75% of surveyed Germans think their domestic economy is good, compared to a median of just 9% in the other countries surveyed who said the same about their domestic economy. 77% of Germans said their personal economic situation is good. Barely more than half said the same elsewhere.
An economically ascendant and politically isolated Germany was precisely what the euro was meant to prevent. Instead, George Soros says the “euro is in the process of destroying the European Union.” — Ben Walsh
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