Eurozone still in crisis in 2014?

Last week, we took a look at how the Eurozone crisis of 2010 affected Ireland, Greece and Spain—3 of the hardest hit countries. In Spain and Greece, austerity measures and rioting were the norm for years while in Ireland a burst housing bubble led to financial disaster. Read that post here!

Today, we’re returning to this topic and those places to find out how things may or may not have improved since 2010.

Greece, 2014

According to this article from Greek finance minister Yannis Stournaras things are more or less coming full circle after years and years of recession.

The talking points:

  • 85% debt consolidation. This means what the Greek government owes the EU is on its way to being paid back.
  • Primary surplus growth exceeds 1% of GDP while the target was 0%.
  • In 2014, after 6 years of recession, the Greek economy will return to positive growth rates.

Unfortunately, unemployment (27.3%) is still quite high, but, as Stournaras points out, this can’t be helped when your country’s economy declined by 25% over the last 5 years.

Presumably, it’s safe to say by comparison to how things were 4-6 years ago that the Greek economy is showing signs of life. However true that may be, without jobs returning real Greek economic recovery is still years and years down the road and the common folk are still taking the most direct hits. This article from Bloomberg illustrates that point quite well.

Spain, 2014

Spain is a good overview for how much of the Eurozone economy looks nowadays: huge unemployment percentages, small though positive growth rates and looming deflation. As this article points out rather astutely, “Recovery may be here, but joy will be a long time coming.”

This article on Spanish prices does a good job explaining deflation in Spain.

The fear is that even as unemployment rates fall and the economy begins to improve consumer prices will drop which will drive down consumer spending in anticipation of even lower costs. This in turn will force businesses to cut labor costs thus limiting job growth amongst other issues. So, it’s not just inflation, but the ogre of deflation that Europeans are wary of these days.

This is not only a fear in Spain but throughout Europe and in places such as Greece it is already clearly the reality.

Ireland, 2014

This article explains the Irish jobs mystery. While Ireland’s GDP shrank last year, it still produced jobs, something Greece and Spain were not able to do. Ireland’s unemployment rate is near the Euro average at about 12%. That is still quite high, but it is indicative of real recovery.

What does this say about the overall nature of the Irish economy?

It says the Irish GDP is not a good indicator of the actual Irish economy, and that jobs are. It’s safe to assume the Irish economy is on its way back.

R. I. P. Peaches Geldoff

If you’d like more information on this topic, we’ve put together a great curated source on You can visit it here and thanks for reading!

If you have anything you’d like to add or an insight to make, please feel free to do so in the comments section. Happy tax filing!

About the author

Seattle CPA+John Huddleston has written extensively on tax related subjects of interest to small business owners. Since 2002, he has owned his own small business, Huddleston Tax CPAs. He is a graduate of Washington State University and the University of Washington School of Law.

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