The 16-nation Eurozone economy shrank more than expected in in the second quarter, falling at an annualized 4.8% rate vs. expectations of 4.7%.
Even the 27-nation European Union fell at a similar rate. It was the fifth consecutive quarter of GDP declines.
This has caused deficit spending to become a major problem for 20 out of 20-seven European Union members.
Nine of these countries have just today been charged with breaching commitments to keep budget deficits under 3% of GDP.
AFP: Brussels already launched action against Latvia, Lithuania, Malta, Poland and Romania in July following earlier procedures against France, Greece, Ireland and Spain.
Finance ministers from the 16 countries that use the euro agreed last week at a meeting in Sweden that countries would have to start taking action in 2011 against debt and public deficits.
The Euro even fell vs. the dollar overnight.
It remains to be seen whether the Eurozone’s currency system can prove more disciplined when it comes to controlling deficits than that of the U.S. Luckily the U.S. has set the bar pretty low.