The Crisis Isn’t Over Yet

The recession is over. That sounds good, but what does it mean? Recession. As with much in economics, it’s a technical term. People talk of a recession when the economy contracts during two consecutive quarters. A recession, then, is an especially steep decline, an especially intensive retraction in the economy. It may last a year or two, or even for three or four years. Then a recession turns into a depression, such as the one in the ’30s during the last century.

When economists announce that the recession in Germany, in Europe and in the United States has passed, they only mean that the economy has stopped contracting. That’s a long way from real and durable recovery because while the gross domestic product (GDP) may be again on the rise, the number of jobs is decreasing. The number of unemployed in the United States is currently at its highest level in almost three decades; in Germany, the number of those affected by the crisis, despite the fact it is not of their making, will sharply increase in the coming year. Economists predict nearly four million Germans will be unemployed in 2010.

So it’s really cynical for the prophets of economic recovery to announce the end of the crisis. For millions in Europe and America, it is just beginning; for millions more, it is yet to come. Of course, it’s good news that economic decline has been slowed because of the various recovery measures instituted. But the effects of this crisis will continue to be felt for many years to come.