Somewhere close to stagnant was the best the largest European economies could do in the second quarter, Eurostat said Tuesday.
Germany's economy rose 0.3 percent in the second quarter from the first and 1 percent from the same period a year earlier, Eurostat said. That alone throws a shadow over the eurozone where Germany contributes the largest share of international rescue funds required of countries like Greece where the gross domestic product fell 6.2 percent year-over-year in the second quarter, a dastardly decline but not quite as sharp as the 6.5 percent year-over-year contraction in the first quarter.
It is unlikely the improvement is much cause for celebration. The cyclical tourism industry is showing signs of improvement. Economically, that's the equivalent of foreign investment, representing money from abroad, a method of making gains based on wealth generated elsewhere.
For the third consecutive quarter, France showed zero growth, the economy neither up, nor down. On an annual basis, the GDP is up a lethargic 0.3 percent.
For the eurozone, the economy shrank 0.4 percent compared to the second quarter of 2011 and 0.2 percent compared to the first quarter of this year. In the first quarter, both the year-over-year and quarter-to quarter growth figure came to zero, barely keeping the 17-nation currency region from a return to recession, which is defined as two negative quarters in a row.
In the 27-member European Union, the quarter-to-quarter GDP fell 0.2 percent, matching the annual difference. In the first quarter, the GDP was unchanged quarter-to-quarter and up 0.1 percent compared to the same period a year earlier.
All this resembles a golf ball that goes up to the cup, but stops less than one revolution away from a fall.
Outside of the eurozone, Sweden posted the highest growth in Europe with the economy growing 1.4 percent in the second quarter over the first and 2.2 percent over the second quarter of 2011. In Latvia, the economy grew 1 percent from the first quarter to the second and 4.3 percent from the second quarter a year earlier.
Slovakia also posted relatively strong numbers with 0.7 percent growth in the second quarter from the first and 2.9 percent compared to the second quarter of 2011.
Five eurozone states are in recession individually: Cyprus, Italy, Spain, Portugal and Greece. Outside the eurozone, add Britain to the list.
How does this reflect on economic policy? The most recent knee-jerk battle cry is for struggling countries to re-establish stimulus spending to some degree to try to provoke growth. With contracting economies, however, governments are watching their tax revenues fall and the need for social programs rise.
Stock markets in Asia headed lower Tuesday, while most major stock indexes made gains in Europe.
The Nikkei 225 index in Japan lost 0.07 percent while the Shanghai composite index in China gave up 1.51 percent. The Hang Seng index in Hong Kong slipped 0.27 percent while the Sensex in India rose 0.43 percent.
In Australia, the S&P/ASX 200 gained 0.14 percent.
In midday trading in Europe, the FTSE 100 index in Britain slipped 0.25 percent while the DAX 30 in Germany was flat, rising 0.1 percent. The CAC 40 in France rose 0.22 percent while the Stoxx Europe 600 index gave up 0.18 percent.
In Washington, the Futures Trading Commission and the Comptroller of the Currency are both looking into credit card debt collection practices using a starting point that resembles the foreclosure fiasco that erupted in late 2010 and forced several major banks to halt foreclosure proceedings to review their processes. Six major banks ended up paying $26 billion to settle accusations they were cheating borrowers of their legal right with practices such as "robo-signing," which involve an employee signing a legal document unread.
Ironically, The New York Times reported, an estimated 95 percent of the debt-collection lawsuits, which could result in garnished wages or frozen bank accounts, are won by default, as a large majority defendants never show up in court to argue their cases. If they did, some legal experts say, they would find companies banking on quantity, rather than quality, meaning their cases are often too shoddy to stand up in court, but since no one is challenging them, the plaintiffs win anyway.
This could still lead to a massive legal dispute. Lawyers could easily argue delinquent borrowers are not showing up in court because lenders are not playing buy the rules.
|Additional Analysis: Economic Outlook Stories|
TEL AVIV, Israel, May 17 (UPI) --Nobel Energy of Houston, which discovered Israel's big gas fields in the eastern Mediterranean, is pressing the government to decide soon on an energy export policy as the prospect of an undersea pipeline to Turkey gains credibility.