–Three of Europe’s largest economies are under threat of recession, which could spell a crisis across Europe.
–Dozens of companies in Germany have turned to “short-time” work — cutting employee hours — a canary in the coal mine of industrial weakness
–Britain could also already be in a recession despite having not left the EU due to the uncertainty caused by Brexit.
–View Markets Insider for more stories.

Three of Europe’s biggest economic engines — the UK, Germany, and Italy — are sputtering simultaneously.

Eurozone growth looks “dire” in the second quarter, Pantheon Macroeconomics said in a report on July 22, “primarily thanks to a crash in German growth.”

The economists see “elevated risks of outright falls in Italian and German GDP,” despite the “resilient” economies of France and Spain.

Outside of the eurozone, but not yet out of Europe, the UK is stumbling as well. The National Institute for Economic and Social Research said that uncertainty surrounding the decision to leave the EU three years ago means there’s a one-in-four chance the economy could already be in recession.

Pantheon Macroeconomics

Since the end of last year, the German manufacturing sector has performed poorly and is “effectively in a recession,” Pantheon Macroeconomics says.

There are other warning signs. German companies are now putting their workers on “short time.” The Financial Times, citing the Ifo Center for Macroeconomics and Surveys, reported: “German industrial weakness is now beginning to leave its mark on the country’s labor practices,” with “more and more companies seeking to curb their wage costs by reducing employees’ working hours — a sign of emptying order books and slowing output.”

Read More: Germany, the backbone of Europe’s economy, ‘hit a brick wall’ in the second quarter

Pantheon Macroeconomics

Italy’s debt is a huge problem

Italy’s economy, meanwhile is “still on the ropes,” says Pantheon Macroeconomics head eurozone economist Claus Vistesen. GDP in Italy “probably stumbled again,” falling 0.21% in the second quarter, he said in the note.

While labor data “will weaken in the second half of 2019,” he said in a separate note on July 16.

Pantheon Macroeconomics

See More: Italy’s ‘perma-recession’ could trigger a €2 trillion financial crisis that threatens the eurozone itself

However, it is debt that is one of the real issues. It currently stands at about €2 trillion ($2.25 trillion). Debt to GDP has reached 130%, a level not seen since World War II.

Jack Allen, an analyst at Capital Economics, told Business Insider back in April that the public debt ratio will probably continue rising and eventually prove unsustainable.

“This would be a bigger problem than the previous euro-zone crisis and could once again endanger the single currency itself,” Allen said.

And then there’s the UK

Read more: The UK might already be in a recession — before even leaving the EU

Britain’s new Prime Minister, Boris Johnson, will have the challenge of tackling leaving the EU, which will likely cause a decline in the economy whatever the deal.

And given that Johnson, in the run-up to being elected leader, said that Britain would leave the EU “do or die,” “no deal” scenarios are now more likely.

NIESR says: “In an alternative, orderly no-deal scenario, we would expect GDP growth to fall to zero in 2020, and CPI inflation to rise above 4%.”

NIESR

Source: https://markets.businessinsider.com/news/stocks/uk-german-and-italian-economies-all-tanking-at-same-time-2019-7-1028376665

The post The UK, German and Italian economies are all tanking at the same time first appeared on Garner Ted Armstrong Evangelistic Association.

• Germany’s economy avoided a recession at the end of 2018, and analysts expected to see improvement this year. But the picture likely got worse at the start of 2019, according to data released Friday.
• The Ifo Institute for Economic Research’s survey of sentiment in the German economy tanked to a four-year low in February.
• It “held no good news” for the economy, with one analyst saying that Germany is now close to being pushed “over the edge.”
• “Verdammt,” [goddammit] one analyst concluded.
• You can see all of Business Insider’s coverage of Germany’s economic crisis here.

Germany may have narrowly avoided a technical recession at the end of 2018, but worst is likely yet to come for Europe’s most powerful economy if data released on Friday is anything to go by.

The Ifo Institute for Economic Research on Friday released its latest data on sentiment in the German economy, and it was shockingly bad, hitting multi-year lows in the month after it was confirmed that Germany skirted a recession by just 0.2 percentage points. The Ifo sentiment index correlates closely to GDP growth.

Analysts had previously believed that Germany’s weak performance in the last half of 2018 had been the combination of a large number of one-off factors, such as new diesel regulations for cars and the Rhine drying up after a hot summer. They had expressed hope that with those factors out of the way the economy would pick up again in 2019.

“The Ifo index held no good news for the German economy, falling yet again in February to 98.5 from 99.3 – a four-year low,” Oliver Rakau, chief German economist at Oxford Economics wrote in a note to clients soon after the data was released.

“A one-point drop in firms’ assessment of the current situation was the main headwind, highlighting that the near-term growth outlook remains clouded,” he added.

Read more: Europe’s mightiest river is drying up, most likely causing a recession in Germany. Yes, really.

Germany is being buffeted by a whole heap of external and internal factors, including the ongoing slump in global manufacturing, continued trade tensions between the US and China, stuttering demand for Germany’s key export, cars, and record low water levels on the Rhine river, which has hurt industrial production.

These factors have combined to create an environment where Germany, long the powerhouse of Europe’s economic story, is now helping to drag down smaller economies on the continent.

Oxford’s Rakau grasped for any positives in the data, finding comfort only in the fact that forward expectations dropped only slightly from the previous month.

“The best that can be said about today’s Ifo is that forward-looking expectations ‘only’ fell 0.4 points to 93.8 from 94.2, but that still marked the lowest confidence in over six years as a weaker external backdrop and key risks such as Brexit and US car tariffs took their toll on firms’ outlook,” he wrote.

Pantheon Macroeconomics’ Claus Vistesen had a similarly bleak message about the Ifo survey, noting that the headline figure was “horrible,” and delivers a “somber message” about the German economy.

“The chart [pictured below] shows that the IFO is crystal clear in its sombre message,” he wrote. “Whatever happened in the second half of last year got worse in Q1, and is now threatening to push the German economy over the edge.”

“Verdammt [German for damn it],” Vistesen’s one-word summary of the data concluded.

Pantheon Macroeconomics

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Source: https://www.businessinsider.com/germany-economy-data-worsens-at-start-of-2019-after-horrible-end-to-year-2019-2

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The post ‘Verdammt’: Just when you thought the worst was over, Germany’s economy moved dangerously close to falling ‘over the edge’ into recession first appeared on Garner Ted Armstrong Evangelistic Association.