Europe Falls Into First Recession in 15 Years as Financial Crisis Deepens

[marmar]

Europe Economy Falls Into First Recession in 15 Years (Update2)

By Fergal O'Brien and Simon Kennedy

Nov. 14 (Bloomberg) -- Europe's economy fell into its first recession in 15 years in the third quarter, paving the way for deeper cuts to interest rates and taxes amid the worst financial crisis since the Great Depression.

Gross domestic product in the 15 euro nations shrank 0.2 percent from the previous three months, when it also contracted 0.2 percent, the European Union's Luxembourg-based statistics office said today. The two quarters of contraction -- the result of this year's surges in the cost of credit, the euro and oil prices -- mark the first recession since the single currency was introduced almost a decade ago.

Consumers and companies are feeling the pain as sales, profits and hiring deteriorate, forcing the European Central Bank to embark on the fastest round of rate cuts in its history and governments to line up fiscal-stimulus programs. With the U.S. and Asian economies also struggling, leaders from the world's largest nations meet in Washington today to discuss ways to limit the impact of the slump.

``The situation is likely to get worse before it gets better,'' said Nick Kounis, an economist at Fortis in Amsterdam. ``There will be no real recovery before 2010.''

The German economy, Europe's largest, contracted by a bigger-than-expected 0.5 percent in the third quarter, confirming it has entered its worst recession in at least 12 years, its government said yesterday. Ireland and Italy have also slipped into recession this year, while Spain's economy contracted in the third quarter for the first time in 15 years. Growth in the Netherlands and Portugal stagnated. ........(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601068&sid=ayyHaNiLU3IM&refer=home

[unhappycamper]

1. Thank you GWB. n/t

[Joanne98]

2. How come we have more recessions than anybody else?

[bdamomma]

3. yes, this is the domino affect and it's affecting the world

that stupid man bush.