The first quarter of 2009 saw the worst performance in the history of the 16-nation Eurozone since its establishment in 1999.   The 27 nation E.U. also marked the worst performance in its history as GDP shrank by 2.5%.  This annualized loss of 10% to Eurozone GDP is far worse than the worst case expectations of many economists.

Germany, the heavyweight of Eurozone economies, hit the mat even harder with a 3.8% plunge in the first three months of 2009.    (An annualized loss of 15.2%)

Even more alarming were the 1Q’08/1Q’09 performances of  Estonia (-15.6%), Latvia (-18.6%) and Lithuania (-10.9%).   What is notable about the Eurozone figures overall is that the Eurozone is getting far more bruised by the global financial crisis than either the US or the UK.

The credit collapse of both the US and the UK has led to an export collapse in the Eurozone manufacturing economies.  Even though Europe’s exporters managed to avoid the levels of credit bubble insanity experienced by their neighbors to the West, Europe’s export economies are the ones being hit the hardest by the crisis.

As it stands now, these frightening plunges in GDP have not yet resulted in widespread job-losses across the Eurozone, but in our estimation this quiet cannot last.  We foresee job-losses ramping up quickly towards the end of this year as Europe’s manufacturers see continued quarters of tepid demand for exports. There is no easy fix for the Eurozone’s economic problems, and macroeconomic problems are likely to be felt on a far more personal level across the Eurozone soon.