The anemic economic growth of the EU

Fourth quarter 2009 GDP in the EU grew at a very anemic 0.1% relative to the third quarter of 2009.  That is the same growth rate as in Great Britain in the fourth quarter.  What’s more, when compared with growth the previous year GDP actually shrank 2.1%.  Not only that, but only

Analysis: Yet another time on the blog when I am going to say: “This is not good news, folks.”  The EU is technically the second largest economy in the world after that of the U.S.  For it to post such an anemic rate of economic growth despite record levels of government stimulus is very bad news.  The governments in Europe have used about as much debt as they can before risking the solvency of their nations.  That’s also why they don’t really have the capability of bailing the Greeks, Italians, Portuguese and Spanish out.  From here on out economic growth is going to have to happen by businesses innovating and then hiring folks.  That will lower unemployment and increase the confidence of European consumers.  However, real economic growth takes time and an innovative spirit.  Unfortunately, traditionally Europe doesn’t have much of either at this moment.

[Today’s news also makes all the more absurd the EU promise to Greece yesterday.  No details were ever released other than that “a plan had been agreed to.”  That plan’s very few details boiled down to: We are watching Greece.  And the financial markets rallied on that?]

Importance Grade: 9; when the second largest economy in the world grows only by an amount well within the statistical margin for error at the end of the worst recession since the Great Depression, it is not a good sign and it bears continuous monitoring.

Jason