The latest Markit PMI survey is just bad. This survey asks 5,000 businesses questions regarding the business climate and correlates very well with GDP.
Eurozone GDP declined 0.2% last quarter, and the survey indicates another drop in the 3rd quarter fulfilling the definition of a recession. To make matters worse, the combined Eurozone budget deficit is rising faster than anticipated and has increased to 90% of GDP.
If you examine the attached chart, you’ll notice that the last time the PMI was sloping downward from this level was the lead up to the 2009 recession.
Every day I write about the political machinations behind the Eurocrisis– a new fund has been approved, the ECB is firing its big howitzer, or some other nonsense. A recession is cold, hard reality quashing the plans of the EU.
When the PIIGS are in crisis, the northern tier had money to bail them out. Now that the recession is creeping northward, who will pay for all these grand plans?