By Tiffany Hsu
8:29 AM PST, November 15, 2012
The Eurozone is back in a recession, its first in three years, as gross domestic product for the debt-plagued 17-nation bloc contracted 0.1% in the third quarter from the earlier quarter.
In the second quarter, the currency collective tightened 0.2%, according to the official European Union statistics agency, Eurostat. Two consecutive quarterly slips make a recession.
Growth in core countries such as Germany and France couldn't counteract the plunges in long-struggling, austerity-bound nations such as Spain and Italy. Portugal took an especially nasty 0.8% dive.
Even countries that had been expanding took a dive, with the Netherlands experiencing a 1.1% squeeze and Austria contracting 0.1%. Germany saw its growth slow to 0.2% in the third quarter from 0.3% in the second.
France, however, reversed a string of flat or down quarters with 0.2% expansion.
The wider, 27-member European Union escaped recession, its GDP advancing 0.1% in the third quarter after tightening 0.2% in the second. In Britain., fresh off the Summer Olympics, the economy boomed 1% after a 0.4% drop.
A separate Eurostat report Thursday showed annual inflation in the euro-currency area down to 2.5% in October, from 2.6% the previous month.
In a speech Thursday, European Central Bank President Mario Draghi urged governments to avoid tax hikes in favor of spending cuts as a strategy for fiscal consolidation. He also stressed the need for "calm pragmatism going forward.
"It is essential that all parties involved in Europe's large and complex path of reforms stick to their commitments," Draghi said.
Copyright © 2014, Los Angeles Times