WSJ: Eurozone Recovery Slows to a Crawl

Friday, 15 Nov 2013 11:51 AM

By Dan Weil

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The ballyhooed rebound by the eurozone from its recession is now barely a rebound at all.

The region's GDP grew only 0.4 percent annualized in the third quarter, down from 1.1 percent in the second quarter.

Fiscal austerity and weak demand are combining to put a crimp on things, The Wall Street Journal reports. The eurozone clearly hasn't escaped the fallout of the debt disaster that has burdened the area since the global financial crisis ended in 2009.

Editor’s Note:
Opinion: Retirees to Be Hit With Social Security Cuts

For many Europeans, especially in the beleaguered south, things haven't improved much. "Worry is the dominant sentiment," Alain Fontaine, owner of a Paris restaurant, tells The Journal.

While European Central Bank President Mario Draghi says the eurozone's fundamentals are "probably the strongest in the world," many observers see no easy way out of the malaise.

Many Europeans had hoped that Germany, whose economy grew 1.3 percent annualized last quarter, could help boost its neighbors. But the nation has proven reluctant to increase spending in both the public and private sector, The Journal notes.

Meanwhile, the French and Italian economies contracted a bit last quarter.

Hedge fund icon George Soros, chairman of Soros Fund Management, sees the euro currency as a failure.

"My worst fears are confirmed," he tells The New York Times. "This is what I was afraid of, that the euro would be preserved and it would pervert the venture and destroy the European Union. Instead of the solidarity that was supposed to be embodied, it became every country by itself."

Editor’s Note: Opinion: Retirees to Be Hit With Social Security Cuts

Related Stories:

Survey Points to Stuttering Eurozone Recovery

Eurozone Recovery Grinds to a Near Halt

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