Published November 15, 2012
BRUSSELS – The euro zone fell into a recession in July-September, the second since 2009, as French resilience could not make up for a slump across Europe and the three-year debt crisis slowed Germany to a crawl.
Economic output in the 17-country euro zone fell 0.1 percent in the third quarter, the EU's statistics office Eurostat said on Thursday, following a 0.2-percent drop in the second quarter.
Seaprate Eurostat figures showed the euro zone's annual inflation fell to 2.5 percent in October from 2.6 percent in September, suggesting an end to a run of stubborn inflation that has contributed to the difficult environment.
PAUL DE GRAUWE, LONDON SCHOOL OF ECONOMICS
"We are now getting into a double dip recession which is entirely self-made.
"It is a result of excessive austerity in southern countries and unwillingness in the north to do anything else.
"Countries in the south have to reduce their deficits, but they cannot if those in the north with a surplus are not willing to help with stimulus.
"This divide, even hostility, between countries is stronger than I have seen in the last 20 years.
"The degree of austerity has now put so many people in terrible conditions that they reject all of this. That's a very dangerous situation."