Europe’s economic recovery slows down

Europe’s economic recovery has stalled, new data out on Friday showed, with the heavyweight German economy slowing to a halt in the fourth quarter of 2009 and Italy switching back to contraction.

Economic growth in the 16 nations using the euro single currency was a meagre 0,1% over the previous quarter compared with 0,4% growth in the third quarter, data agency Eurostat said.

Gross domestic product fell by 4% over the whole year, it added.

Elsewhere in Europe, growth slowed to 0,3% in The Netherlands and to 0,4% in Austria, but the recovery sped up in France, where growth was at 0,6% for the fourth quarter compared with 0,3% in the third.

There was a mixed picture in Central and Eastern Europe too. The Czech Republic fell back into contraction following two quarters of growth, while Hungary’s prospects were brighter as the contraction slowed to 0,4%.

Europe in general has begun to emerge from what is in most cases record recessions, but the recovery process is expected to be slow and bumpy because business investment and consumer consumption are still weak in many cases.

Full year figures showed that Germany, the biggest European economy, contracted by 5% in 2009, France by 2,2%, The Netherlands by 4%, Austria by 3,6% and the Czech Republic by 4,3%.

The latest German data showed that “the recovery of the German economy lost momentum at the end of 2009”, the Destatis office said in a statement.

The German economy is heavily dependent on exports and once again they made the only positive contribution in the final three months of the year, since consumption and business investment were both down, Destatis said.

In the full 27-nation European Union, growth decreased by 2,3% over the year. — AFP

Staff Reporter
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