The reasons of a vanishing recovery, while the general slowdown becomes recession in Italy and Spain.
What has it happened to the Eurozone after the 2009 collapse? The data show a recovery but it loses intensity and vanishes; even official estimates speak of a -0.6% decline in GDP for the entire Eurozone in 2013. The cause is not unknown: it is the choices of austerity imposed by Germany and allies. We may look at four great countries (France, Germany, Italy and Spain) that represent over the three quarters of Gdp of the Eurozone. Here are the data (annual rates of variation) of the main components of Gdp:
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2010 2011 2012
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GDP
France 1,7 2.0 0. 0
Germany 4,2 3 0,7
Italy 1,7 0,4 -2,4
Spain -0,3 0,4 -1,4
Private Consumption
France 1,6 0,6 -0,3
Germany 0,9 1,7 0,6
Italy 1,5 0,1 -4,2
Spain 0,7 -1.0 -2,1
Collettive Consumption
France 1,8 0,4 1,4
Germany 1.0 1.0 1,4
Itaya -0,4 -1,2 -2,9
Spain 1,5 -0,5 -3,7
Fixed Investment
France 1,4 2,9 -1,2
Germany 5,9 6,5 -2,5
Italy 0,6 -1,8 -8.0
Spain -6,5 -5,3 -9,1
Export/Import
France 9,5/8,9 5,4/5,1 2,4/-1.1
Germany 13,7/11,1 7,8/7,4 3,7/1,8
Italy 11,4/12,6 5,9/0,5 2,3/-7,7
Spain 11,3/9,2 7,3/-0,9 3,1/-5
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The overview is that of a general slowdown, which becomes recession in Italy and Spain, but that involves Germany itself. In 2012, all four countries have a drop in investment than in the case of Spain arrives (in three years), almost 20% (as a result of the crisis in the construction sector). The reflection can be seen in changes in exports and imports, which fall and even become negative.
Consider what happened in 2009. Below we see the fall in GDP in 2009, the public deficit and the increase of the debt (both as a percentage of GDP) of the same year. Also due to the greater weight of the manufacturing sector, Italy and Germany are the two countries where the fall production is stronger, but so is because both countries use less discretionary policies of support: the increase in the deficit compared to previous year is respectively 2.8 (Italy) and 3 (Germany). Conversely France and especially Spain embark on expansionary much more robust: the increase in the deficit is 4.2 (France) and 6.7 (Spain). As a result of the fall in GDP is lower in these two countries.
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2009
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Gdp downfall Deficit debt increase
France -3,1 7,5 11.0
Germany -5,1 3,1 7,7
Italy -5,5 5,5 10,3
Spain -3,7 11,2 13,7
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As in all countries, the deficit increases while nominal GDP is reduced (the price increase is less than the fall production) the debt-to-GDP goes up. At this point it happens a causal reversal, due to the dominant view in Berlin and Brussels: the increase in the debt becomes the cause of the crisis. Contribute to this reversal the ordo-liberal vision, the Nordic worry of a EU like a Transfer-union, and the Greek case (which demonstrates the Mediterranean unreliability); Europe (or rather the European right) opted for a generalized fiscal austerity.
In 2010 financial markets discover that behind the debts of the PIIGS countries there is a central bank ready to act, as is the case in the UK (not to mention the United States); Greece, Ireland and Portugal give up their sovereignty to the Troika, and Italy and Spain must obey in order to avoid a similar fate. The only component that can provide a positive impetus to GDP is exports; no wonder that Germany has benefited, since the weight of its exports exceeds 50% of GDP and is increasingly moving out of Europe (other countries are around 30%).The result is that even in the years 2010-2012 public debts continue to rise, even in Germany:
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France Germany Italy Spain
11 7.4 10.6 30.3
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The Spanish case is the most significant: the austerity policy has increased the debt by ten points each year, in 2012 Spain had a deficit of 10.6, that is, only 0.6 less than in 2009.
It is now evident that across Europe there is a problem of lack of demand. The solutions, in theory, are not mysterious: large investment projects at the European level according to the guidelines outlined at the time by Delors, or strong expansionary policies by Germany and the other countries that have trade surpluses. While continuing with the taboos of 3%, and dancing to the music of the fiscal compact, all European countries will be able to appreciate the complex relations among austerity policy, stagnation of GDP and rising debt.