EU predicts 0.3 pct eurozone contraction in 2012

BRUSSELS — Europe will take longer to recover from its economic crisis as it tackles a worse-than-expected recession in the eurozone and unemployment at record levels, the European Union warned Friday. In its spring economic forecast, the EU said that gross domestic product in the 17 member countries that use the euro will shrink by 0.4 percent this year, better than the 0.6 percent contraction in 2012 but 0.1 percentage points worse than the EU had forecast back in February.

BRUSSELS — Europe will take longer to recover from its economic crisis as it tackles a worse-than-expected recession in the eurozone and unemployment at record levels, the European Union warned Friday. In its spring economic forecast, the EU said that gross domestic product in the 17 member countries that use the euro will shrink by 0.4 percent this year, better than the 0.6 percent contraction in 2012 but 0.1 percentage points worse than the EU had forecast back in February.

Recession-hit countries including France, Spain and Italy won greater budget freedom as the European Commission tried to stem the euro economy’s longest slump and bring down a 24% youth unemployment rate. The commission eased up on the austerity policies championed by Germany in the wake of the debt crisis without proposing new spending programs for the 17-nation eurozone, set to be the world’s weakest economic link in 2013.

There are numerous signs the entire Eurozone is in recession, including Germany. Nonetheless economic dunces talk as if recession can be avoided. For making just that claim, I blasted the IMF on Monday in Dimwit Comment of the Day: Christine Lagarde, IMF Director says "Europe May Avoid a Recession This Year". Let's ponder a sampling of data released today that proves without a doubt Europe is already in recession.

LONDON/BEIJING — European manufacturing appeared no closer to recovery last month while growth in Asia cooled, according to business surveys and trade data on Friday that pointed to ongoing weakness in global demand. Purchasing managers’ reports from the United States due later, however, are expected to show growth picking up in the world’s largest economy, after a weak fourth quarter. In China, factory growth slowed to multi-month lows. Sluggish domestic demand added pressure to already depressed foreign sales, two separate purchasing manager indexes (PMI) showed.

We do believe the worst is behind us The euro-area recession deepened more than economists forecast with the worst performance in almost four years as its three biggest economies suffered slumping output.