Europe Falls Even Deeper Into Recession As Austerity Keeps Taking Its Toll

The economic news in Europe continued to get worse on Thursday, as the Eurozone fell even deeper into recession, contracting by 0.6 percent in the fourth quarter. This is the first time since 1995 that the Eurozone has produced no quarters of growth over a full year:

It marked the currency bloc’s first full year in which no quarter produced growth, extending back to 1995. For the year as a whole, gross domestic product (GDP) fell by 0.5 percent.

Economic output in the 17-country region fell by 0.6 percent in the fourth quarter, EU statistics office Eurostat said on Thursday, following a 0.1 percent output drop in the third.

The quarter-on-quarter drop was the steepest since the first quarter of 2009 and more severe than the average forecast of a 0.4 percent drop in a Reuters poll of 61 economists.

Even supposedly mighty Germany saw its economy contract by 0.6 percent. Across the whole of the Eurozone, only Estonia and Slovakia experienced economic growth.

This is more evidence showing that European austerity has been an utter failure. Instead of ushering in prosperity, attempts to slash deficits and debt have actually caused more debt by depressing economic growth. As this chart from Paul Krugman shows, austerity goes hand in hand with unemployment:

But lawmakers in the U.S. still want to follow Europe’s lead, slashing spending while unemployment remains stubbornly high. The so-called “sequester” set to take place on March 1 will cost the country one million jobs, according to the Bipartisan Policy Center.