The euro-area economy slipped into a recession for the second time in four years as governments imposed tougher budget cuts and leaders struggled to contain the debt crisis that broke out in October 2009.
Gross domestic product in the 17-nation single-currency bloc slipped 0.1 percent in the third quarter after a 0.2 percent decline in the previous three months, the European Union’s statistics office in Luxembourg said today. That’s in line with the median forecast in a Bloomberg News survey of 44 economists. From the year-earlier period, GDP dropped 0.6 percent.
Europe’s economic malaise is deepening as governments across the region impose budget cuts to narrow their fiscal deficits. Spain and Cyprus have joined the list of countries seeking external aid, while Greece, Portugal and Ireland are already in bailout programs. Unions across the region have held protests against austerity measures.
“Overall I think it’s remarkable that we haven’t seen so far in the last year a stronger decrease in economic activity considering the strength of the euro-zone debt crisis,” said Alexander Krueger, chief economist at Bankhaus Lampe in Dusseldorf. “Stopping the downward trend is the story for the first half of next year.”