Britannia Radio

EU OBSERVER     8.1.09
EU economy buckles
LEIGH PHILLIPS

A stark series of data released on Thursday certify the grim state of 
the European {NO!   the  EUROZONE  economy please,  The are 11 
countries in the EU not in the Eurozone -cs]   economy, with 
unemployment up, GDP sliding, and both economic sentiment and 
business climate indicators reaching all-time lows.

The eurozone's gross domestic product declined by 0.2 percent in the 
third quarter of 2008 compared with the previous quarter, according 
to estimates from Eurostat, the EU's statistics office.

The EU performed middlingly out of the big three economies, with US 
GDP declining 0.1 percent and Japanese GDP down 0.5.

In the second quarter, the eurozone's growth rate had also been -0.2 
percent, meaning that the region is officially in its first recession 
since the launch of the euro, as economists defined a recession as 
two quarters in a row of decline.

The wider EU also saw a GDP decline of 0.2 percent in the third 
quarter, according to additional Eurostat figures. The bloc as a 
whole narrowly escaped recession, as in the second quarter, growth 
stagnated at 0.0 percent.
Slovakia recorded the highest growth out of all EU member states in 
the third quarter, on an anaemic 1.5 percent, followed by Ireland and 
Poland (both grew by 1.2%).

A limp blip in household consumption however in the third quarter was 
some of the only good news to be issued by the Eurostat office, 
remaining flat, but not declining in the eurozone and rising by 0.1 
percent in the EU overall.
The positive figures come after a slide of -0.2 percent and -0.1 
percent respectively in the second quarter.

German exports fall off the cliff
Exports remained unchanged in both the eurozone and the wider EU 
after the previous quarter's drop of -0.1 percent in both.
However, German exports fell off the cliff, plunging record 10.6 per 
according to the country's own statistical office. The sudden 
collapse of German exports is all the more surprising given the 
marginal decline of only 0.6 percent in October.

Meanwhile, investment fell by 0.6 in the euro area and 0.8 percent 
across the EU.

Unemployment in the eurozone meanwhile climbed slightly in November 
last year, according to Eurostat, up to 7.8 percent from 7.7 percent 
the previous month.

Across the EU, unemployment rose to 7.2 percent, up from 7.1 percent 
in October, for a total of some 17.5 million men and women out of work.
Joblessness grew for the first time in three years in Germany, 
climbing to 7.6 percent in December, up slightly from 7.5, according 
to stats from the German Federal Labour Agency.

Third of Spanish youth unemployed
Unemployment has however galloped apace in Spain, the EU member state 
with the most jobless - with unemployment rising 47 per cent to reach 
3.1 million in December, according to Spanish labour ministry figures 
also issued on Thursday, bring the total to 13.4 percent of the 
country's working-age people.

Spanish commentators predict the figure to climb to 17 percent in 
coming months. The figures are particularly worrying when it comes to 
young people in the Iberian country, which is home to the highest 
youth employment rate (of people under the age of 25) in the EU, on 
29.4 percent.

Sweden also has been beset with spreading unemployment amongst the 
young, with 23.8 of them unable to work.

Youth joblessness climbed up firmly across the EU and the eurozone, 
at 16.4 percent for both, up from 14.7 percent and 14.5 respectively.

The lowest youth unemployment rates were seen in the Netherlands 
(5.4%) and Austria (6.9%). The lowest unemployment rates overall were 
also found in the Netherlands (2.7%) and Austria (3.8%), alongside 
Cyprus (3.9%).

US unemployment for November last year was lower than on the Old 
Continent, on 6.7 percent, while Japan's unemployment rate was lower 
still, on 3.9 percent.

Confidence lowest since 1985
Additionally, the Business Climate Indicator survey of industry for 
the eurozone fell sharply in the last month, reaching its lowest 
level since 1985.
According to the European Commission, this continued steep decline of 
the indicator signals a deteriorating trend in industrial production 
growth, with managers reporting a sharp fall in production and stocks 
of finished goods increasing.

Economic confidence also slid considerably in the EU and across the 
eurozone, as measured by the Economic Sentiment Indicator, following 
on from marked drops seen in surveys in October and November. Here 
too, the ESI is at its lowest level since 1985.