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Euro Zone’s Economic Health Is Better, but Not Good Euro Zone’s Economy Is Still Ailing, but Improving
(about 11 hours later)
THE euro zone’s back-to-back recessions may be over. Most economies are growing, and employment totals have begun to inch upward. New-auto sales, which plunged in 2011 and 2012 as the second recession gathered strength, have risen in Europe in each of the last six months.THE euro zone’s back-to-back recessions may be over. Most economies are growing, and employment totals have begun to inch upward. New-auto sales, which plunged in 2011 and 2012 as the second recession gathered strength, have risen in Europe in each of the last six months.
But saying things are getting better is not the same as saying they are good. In reporting that new-car registrations across the European Union were up 8 percent in February from the same month in 2013, the European Automobile Manufacturers Association noted this week that “in absolute figures, the total of 861,058 units registered marked the second-lowest result to date for a month of February” since figures began to be compiled for an expanded European Union in 2003.But saying things are getting better is not the same as saying they are good. In reporting that new-car registrations across the European Union were up 8 percent in February from the same month in 2013, the European Automobile Manufacturers Association noted this week that “in absolute figures, the total of 861,058 units registered marked the second-lowest result to date for a month of February” since figures began to be compiled for an expanded European Union in 2003.
The accompanying charts illustrate the overall double-dip, which was visible in many European countries — though not Germany, whose results have been considerably better than those of most other countries. The charts show how car sales, employment and gross domestic product compare with 2007 figures, before the Great Recession began in the United States and spread around the world.The accompanying charts illustrate the overall double-dip, which was visible in many European countries — though not Germany, whose results have been considerably better than those of most other countries. The charts show how car sales, employment and gross domestic product compare with 2007 figures, before the Great Recession began in the United States and spread around the world.
The postrecession recovery has been steady, if slow, in the United States. But as the euro zone crisis erupted, with Greece, Ireland and Portugal needing European bailouts, the second recession began.The postrecession recovery has been steady, if slow, in the United States. But as the euro zone crisis erupted, with Greece, Ireland and Portugal needing European bailouts, the second recession began.
That can be seen most clearly in the G.D.P. figures for the euro zone countries other than Germany. The second downturn began in late 2011 and appears to have hit bottom in the first quarter of 2013. Now, economies have begun to grow again in Spain, Portugal and Ireland. But in Greece, the best that can be said is that its economy is going down at a slower pace than it did before. In Italy, the figures continue to decline, and while the French economy is growing, the number of people with jobs is not increasing. France was also alone among major European countries in reporting fewer new-car registrations in February than in the same month of 2013.That can be seen most clearly in the G.D.P. figures for the euro zone countries other than Germany. The second downturn began in late 2011 and appears to have hit bottom in the first quarter of 2013. Now, economies have begun to grow again in Spain, Portugal and Ireland. But in Greece, the best that can be said is that its economy is going down at a slower pace than it did before. In Italy, the figures continue to decline, and while the French economy is growing, the number of people with jobs is not increasing. France was also alone among major European countries in reporting fewer new-car registrations in February than in the same month of 2013.
Elsewhere, employment is generally going up, albeit from low levels, and the Greek fourth-quarter increase, of 6,900 employees, or 0.2 percent, was hardly proof of a turnaround. The European Union’s statistical agency, Eurostat, released the fourth-quarter figures last week after making sure the methodology was constant in all countries.Elsewhere, employment is generally going up, albeit from low levels, and the Greek fourth-quarter increase, of 6,900 employees, or 0.2 percent, was hardly proof of a turnaround. The European Union’s statistical agency, Eurostat, released the fourth-quarter figures last week after making sure the methodology was constant in all countries.
Even with the fourth-quarter improvement, the number of people working in most euro zone countries is well below the level of late 2007. Many of those countries have suffered from a loss of competitiveness relative to Germany, a loss that cannot be offset by currency depreciation since all use the same currency. Germany, where employment is almost 5 percent higher than it was in 2007, has been helped by the fact that the euro is probably weaker than a stand-alone German currency would be.Even with the fourth-quarter improvement, the number of people working in most euro zone countries is well below the level of late 2007. Many of those countries have suffered from a loss of competitiveness relative to Germany, a loss that cannot be offset by currency depreciation since all use the same currency. Germany, where employment is almost 5 percent higher than it was in 2007, has been helped by the fact that the euro is probably weaker than a stand-alone German currency would be.
In Britain, the only non-euro European country shown, the number of jobs is nearly 3 percent higher than it was in 2007. In the United States, the decline has been almost entirely erased.In Britain, the only non-euro European country shown, the number of jobs is nearly 3 percent higher than it was in 2007. In the United States, the decline has been almost entirely erased.
New-car sales can provide a revealing indicator of economic health. Car purchases can be deferred when the economy is weak, and then surge when conditions improve. But if the weakness persists, customers can avoid new-car purchases altogether, buying used vehicles if a purchase is necessary.New-car sales can provide a revealing indicator of economic health. Car purchases can be deferred when the economy is weak, and then surge when conditions improve. But if the weakness persists, customers can avoid new-car purchases altogether, buying used vehicles if a purchase is necessary.
Nowhere is that clearer than in Greece. Even with a slight pickup in late 2013 and in the first two months of this year, Greek car sales for the last 12 months are nearly 79 percent below the level of 2007.Nowhere is that clearer than in Greece. Even with a slight pickup in late 2013 and in the first two months of this year, Greek car sales for the last 12 months are nearly 79 percent below the level of 2007.