Is Austerity and European GDP in a Death Grip?

What strikes me here is that the nations forced into the greatest austerity measures also have the lowest GDP

The euro crisis

The no-growth zone

May 15th 2012, 16:06 by R.A. | WASHINGTON

IT IS another grim day for European markets. Break-up worries continue to grow. You can read Charlemagne on yesterday's disappointing euro-group meeting. The news has gotten worse today, as Greece's political parties seem to have failed to form a government, meaning that new elections will be held in June. Meanwhile, the tragedy of the performance of the real euro-zone economy was made clear in new GDP figures released today. The euro area managed no growth in the first quarter of 2012. That actually represented a slight improvement from a tumultuous fourth quarter in which the economy shrunk. Given recent economic datapoints, it seems likely that the euro area is contracting again in the second quarter.

As today's Daily chart makes clear, the flatline first quarter was actually a tale of two halves. Germany and Austria managed growth in the first three months of the year while most of the rest of the euro area shrank (quite rapidly, in Italy and Greece). What's really striking to me is the slightly longer view:

Real euro-zone output remains 2% below the level of four years ago. Germany—everyone's favourite growth story—has only barely managed to regain its pre-recession output level and has scarcely done better than France. Double-dip hardly applies for many euro-area economies; "staircase" recession looks more fitting. And Greece, of course, is in a depression from which exit remains a distant hope. 

Given the present outlook, one wonders when the euro zone will finally catch back up to 2008; not this year, certainly. In 2013? Ever? Growth could deliver the euro zone from its crisis, but it has been a long time since the euro zone has been able to deliver growth.