Europe also suffering from slowing economies, high prices
LONDON -- Americans aren't the only ones hurting. Across Europe, the effects of the U.S. financial crisis, credit crunch and high food and energy prices are taking their toll — and not just on bankers and financiers.
In France, cafe and restaurant receipts are down 20% and nearly 3,000 have closed this year, French credit insurer Euler Hermes SFAC says.
In Italy, consumer groups led a one-day boycott of bread recently to protest a 30% price increase this year. The number of Britons drawing unemployment was at a nine-year high last month, the government here reports.
Ireland recently declared itself in recession, with the government's statistics office saying the once-ferocious "Celtic tiger" economy had shrunk for the second straight quarter in June. Denmark was in recession at the end of March. The European Commission says Britain, Germany and Spain could be before the year is out.
"It's global," Howard Archer, chief European economist for the analysis firm Global Insight in London, says of economic woes. "There are some of the same problems (as in the USA) in every country."
The U.S. government on Friday issued a report saying the domestic economy grew 2.8% in the quarter ended June 30. Though the U.S. has thus far avoided slipping into a recession as traditionally defined — two consecutive quarters of decreasing gross domestic product — economists disagree on whether the current sluggishness will eventually be called a recession.
Many of the same factors causing Americans pain are behind the growing agony on this side of the Atlantic: depressed housing values, inflation fed by oil and food prices, and the extended credit crunch.
The meltdown of U.S. banks — including the failure last week of savings and loan giant Washington Mutual — and a concurrent downturn in stock markets the last two weeks has only exacerbated the sense of economic gloom in Europe.
Germany's finance minister, Peer Steinbrueck, blames a culture of greed and a drive for ever-higher profits for the U.S. financial crisis that is helping sink economies, including his own, Europe's biggest.
