Europe getting closer to recession
LONDON (AP) -- Europe is edging closer to recession, dragged down by the crippling debt problems of the 17 countries that use the euro, official figures showed Tuesday.
Eurostat, Europe’s statistics agency, revealed that the economies of both the eurozone and the European Union, which has 27 countries, shrank by a quarterly rate of 0.2 percent in the second quarter of the year. In the first quarter, output for both regions was flat. A recession is officially defined as two straight quarters of falling output.
Europe’s debt woes have been blamed for the sharp deterioration in the global economic outlook over the last few months. The region is the U.S.’s largest export customer and any fall-off in demand will hit order books -- as well as President Barack Obama’s election prospects.
The 17-country eurozone is grappling with sky-high debt levels and record unemployment of 11.2 percent. Compared with the second quarter of last year, the eurozone’s economy is 0.4 percent smaller.
The region’s economy would have slipped into recession had it not been for better-than-expected GDP figures from its two leading economies, Germany and France.