It seems that the Eurozone is currently facing its worst ever and longest financial crisis since the war. The worst part is that there is also no recovery of any sort in sight for a broad area of the continent. The recession of the Euro-zone has now entered into the first quarter of 2013 as well and it seems that it would be really hard to recover from this longest financial slump in the near future. Many o the trade pundits and economists expected that this year would be a turnaround for the euro-zone crisis. But, there has been no hint of this so far and there is also no hint that the situation will be better in the coming months.
Financial Problems Too Many
There are quite a lot of things that have mounted the crisis of the Euro nations like government strictness, banks that are now reserved to lend money, household debts and so on. These are really taking its toll on the finances of popular euro countries. The business surveys that have been conducted on the euro-zone are challenging the official predictions made that the economy of the euro-zone will see a growing path this year.
State Of GDP
The gross domestic product or the production of goods and services in the Euro –zone has fallen in the first three months of the year at a rate of 0.9%. This is the 6th straight quarter recession that the Euro-zone is facing since the recession started to surface in late 2011. The other popular countries like Japan and America have shown jump in the first quarter of 2013 with GDP growing at 2.5% in USA and at 3.5% in Japan. Even the United Kingdom which was under severe recession has shown a marginal growth in GDP in the first quarter of 2013. Depression like situation in Southern Europe coupled with slow global economy growth is really dragging the economies of Euro-zone countries. France is steadily on the downside as far as economy growth is concerned and Germany has hardly moved an inch from its earlier position. The 17 Euro-zone nations that accounts or 17% of world GDP is proving to be the weak link that is pulling the world GDP figures down. It seems that the Euro-zone countries will need to do away with current crisis like political paralysis, increasing debt burdens, social strains and reduce household debts in ore to have a bright economic future which still seems to be a distant dream.
What The Future Holds?
The Southern European countries will have to reduce their wages and other additional business costs and be on par with Germany in order to be competitive in the business sector. This process is known as internal devaluation by the economists and it seems that this process is very slow. Another alternative path that these Euro countries no longer have is the devaluation of the national currency. Higher inflation in Germany or faster growth will help in making the task easier for other Euro countries like Italy, France and Spain and to stay competitive in this highly volatile economic would with the likes of Northern European countries.