Millions of people across Europe are currently affected by the weakening economies and budget deficits. The growth of the gross domestic product (GDP) has slowed down and the future of the euro currency looks uncertain.
Germany has announced just 0.1% growth, an indication that Europe’s biggest economy is close to a halt in the quarter. France, the country with the second largest economy in Europe, reported no growth in the second quarter.
The decline in private consumption and investments from construction industry are the major contributors to the downward economic growth in Germany.
To rescue the battered euro, German Chancellor Angela Merkel met with French President Nicolas Sarkozy on Tuesday, August 16, 2011. The two leaders from Europe’s most important economies called for strict rules for national budgets and deficits. They also proposed more integrated policies in order to stabilize the European currency which in the end may help the European Union recover and restore economic growth.
Prior to this meeting the French government stated that the leaders will discuss “proposals for strengthening the governance of the eurozone,”
Meanwhile, the early trading in the stock markets across Europe also slowed down signalling losses in the Wall Street trading.
Other countries that are in accelerating debt crisis in Europe are Portugal, Greece and Ireland. This situation has been causing fears and doubts to investors.
In Asia, the Japanese government announced a 0.3% decline in its GDP in the second quarter.
On the other hand, the growth rate for the United States in the second quarter was only 0.3%.
The slowdown in growth has shifted the global economy into low gear.