Euro Zone has fallen into its first recession after reports emerged last Friday. The European Central Bank is planning to cut interest rates again in December as inflation continues to fall. Tough times are ahead as financial systems around the world are experiencing the ripple effects of the U.S financial crisis. The economy of 15 countries using the Euro sank 0.2% since July-September, and sank as well in April-June. This is the first time since 1999 that the Euro zone contracted in two consecutive quarters.
Unfortunately this seems to be only the beginning. Banks are expecting negative GDP growth in the third quarter as well. Many are speculating that this negative growth will last well into 2009. "Now the recession has been confirmed, the debate is concentrated on its length and severity. It seems that the current financial crisis is going to affect more significantly the real economy than initially anticipated," said Maryse Pogodzinski, economist at JP Morgan.
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