Europe’s Economy, After 8-Year Detour, Is Fitfully Back on Track
By Peter S. Goodman – April 29, 2016
The New York Times
By one measure, the economic crisis that has long ravaged Europe is finally over.
On Friday, the European Union released data showing that the overall economy of the 19 countries that use the euro advanced 0.6 percent over the first three months of the year, compared with the previous quarter.
That gain, equivalent to an annual rate of 2.2 percent, brought the eurozone’s gross domestic product for the period — the total value of goods and services produced — to slightly above the previous peak reached in the early months of 2008, before the crisis emerged and Europe’s core economy descended into a pair of crippling recessions.
“The long-awaited recovery may finally be consolidating,” said Iain Begg, a research fellow at the European Institute of the London School of Economics.
Yet as milestones go, Europe’s return to precrisis levels of economic activity came with so many qualifiers that any celebration seemed premature, at best, and at worst like a mockery for the tens of millions of ordinary Europeans who have far from recovered. New unemployment data on Friday showed that the eurozone jobless rate, while edging down slightly, remained above 10 percent — more than twice the level in the United States.
“It’s almost a lost decade,” said Joseph Stiglitz, the Nobel laureate economist and a professor at Columbia University. “It’s a remarkable testimony to the economic failure of the euro and the eurozone.”
The strongest economies in the eurozone — major exporters like Germany and the Netherlands — have recovered more handily. But in the worst-hit countries — Cyprus, Greece, Ireland and Italy — ordinary people continue to grapple with the consequences of deep job losses and wage cuts, which have slashed incomes.
In Italy, disposable income for the average household — essentially, take-home pay — shrank 4 percent from 2008 to 2014, according to European Union data. Over those years, Greek households lost 24 percent of their disposable income, and Cyprus suffered declines of 22 percent. At the same time, German households gained more than 15 percent.