15-Nation Eurozone Falls Into Recession

New figures confirm bloc's first ever contraction

By Jason Farago,  Newser Staff

Posted Nov 14, 2008 6:22 AM CST

(Newser) – The 15-nation eurozone has entered recession for the first time since the introduction of the common currency in 1999. The bloc's GDP contracted 0.2% in the second quarter, worse than expected, according to new figures released today. Several individual European nations, including giant Germany, are already contracting, and forecasters see little sign of a turnaround soon.

Europe's response to the global economic downturn has been piecemeal, with individual nations taking charge of their own affairs. But in December EU leaders will work out a collective response, possibly including a bailout of the floundering auto sector. The news also means that the European Central Bank, which has been more prudent than the Fed or the Bank of England, will probably offer a big rate cut at its next meeting.

EU Commission President Jose Manuel Barroso addresses the media at the European Commission headquarters in Brussels, Wednesday, Nov. 5, 2008. European Union officials hailed Barack Obama's election victory...   (AP Photo/Yves Logghe)
Jean-Claude Trichet, president of the European Central Bank, at a news conference in Frankfurt, Nov. 6, 2008. The eurozone, the 15-nation bloc that uses the common currency, has entered a recession.   (AP Photo/Daniel Roland)
The Euro sculpture is photographed through the logo of the European Central Bank in Frankfurt. The eurozone, the 15-nation bloc that uses the common currency, has entered a recession.   (AP Photo/Daniel Roland)
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