THE EUROZONE has recorded its weakest growth in seven years as the crumbling German economy continues to stagnate amid Brexit and the US-China trade row.
German output continued to disappoint in the fourth and final quarter of the financial year, with Gross Domestic Product (GDP) slowing to 0.1 percent compared to the previous three months. This means overall Berlin’s output has plummeted from 0.3 percent. The poor results mean the eurozone was expanding at its slowest pace since early 2013 – a devastating period when the EU was gripped by the European debt crisis.
Last year’s growth plunged to 1.2 percent from 1.9 percent.
Pantheon Macro economist Claus Vistesen said the fall of the Eurozone may get worse due to coronavirus spreading.
He warned “the first quarter could well be a write-off”.
Germany has been on the brink of recession thoughout the entire 2019-2020 financial year, and only narrowly avoided one in the third quarter.
Paul Sommerville of Sommerville Advisory Markets pointed out that Germany’s economy has been “flat for nine months”.
He warned “Germany is on verge of recession again and these numbers are all from before coronavirus”.
But Berlin is not alone in dragging the Eurozone down into an economic crisis.
The French economy has also ground to a halt, largely due to protests triggered by French President Emmanuel Macron’s crippling pension reforms.
Violent protests began in November 2018 over President Macron’s crippling austerity reforms, with at least nine people being killed after they were caught up in fires and stampedes from demonstrators.
The young 41-year-old President now remains under increased pressure after violence continues to break out on the streets of Paris over his Government’s planned pension reforms, with police forced to fire tear gas at protesters as the clashes turned ugly.
There is also fear that tough trade talks with Britain over Brexit could spark a further collapse in European economies.
The EU is already struggling to handle trade tensions with the US and changes in the auto industry.
There had been hope at the beginning of 2020 that the Eurozone had moved past its biggest slump.
However, incredibly weak December industrial production figures published earlier this week signalled today’s reports.
A number of economists are worried the sharp drop in industrial output and consumer spending could drag German and eurozone growth below zero.
The continued outbreak of the coronavirus in China could impact manufacturing supply chains, exports and travel.
Exports of goods to China account for seven percent of all German exports, making up 2.8 percent of national output in 2018, according to the IMF.
Today’s total coronavirus cases stand at 60,000 worldwide.
In the UK, an eight-month-old baby has been infected by a GP who had the killer bug from China.