Europe’s economic slump deeper than expected

Eric Pfanner
The International Herald Tribune
February 15, 2009

Europe sank even deeper into recession than the United States in the closing months of last year, according to figures published Friday, as finance ministers of leading industrialized nations gathered in one of the worst-affected countries, Italy, for discussions on the crisis.

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In the fourth quarter, the economy of the countries sharing the euro declined by 1.5 percent, according to the European Union’s statistics office. That is even worse than the 1 percent decline in the U.S. economy during that period, compared with the previous quarter.

“Today’s data wipes out any illusion that the euro zone is getting off lightly in this global downturn,” said Jörg Radeke, an economist at the Center for Economics and Business Research in London.

Until recently, some economists had thought that Europe might suffer less from the recession, which started in the United States before spreading to most of the rest of the world. While some European economies, including Britain, Ireland and Spain, have seen U.S.-style plunges in home prices, housing markets have held up better elsewhere in Europe. Consumers have also cut back less on their spending in Europe than in the United States.

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