www.beatsbydreluxury.comWRAPUP 1-German economy powers on, French growth evaporates(1 post)
m/Euro zone forecast to subside back into recession
BERLIN/PARIS, May 15 (Reuters) - Germany's economy confounded
expectations by posting robust growth in the first quarter of the year
while France could summon up none at all, data showed on Tuesday.
The divergent performance of the euro zone's two largest economies
will fuel an austerity versus growth debate in the currency bloc as it
teeters on the edge of a new crisis, again centred on Greece.
Gross domestic product in Germany, Europe's biggest economy, rose by
0.5 percent on the quarter, bouncing back from a 0.2 percent slide in
the last three months of 2011. France's economy stagnated, although it
grew slightly at the end of last year.
The figure for the euro zone as whole, due at 0900 GMT, is forecast to
show it shrank by 0.2 percent, following a 0.3 percent contraction in
the last three months of 2011 - putting it back into recession -
although Germany's strong showing could give it a lift.
beats by dre Later on
Tuesday, Francois Hollande will be sworn in as French president and
hot-foot it to Berlin for talks with German Chancellor Angela Merkel.
Hollande is demanding new growth-boosting measures for Europe. Merkel
has not disagreed in principle but Berlin is unlikely to agree to
anything that will require extra spending that pushes government debt
tote"This is a very strong comeback. The decline in the fourth
quarter was not the start of a recession but just an economic dip,"
Joerg Kraemer, economist at Commerzbank, said of the German figures.
Data released two weeks ago showed Spain has already succumbed as it
struggles to reduce its budget deficit and shore up a banking sector
beset with bad property debts.
The second recession in just over two years for the euro zone's fourth
largest economy comes as the government tries to convince investors it
will not need outside aid to put its house in order and will make its
debt-cutting drive that much harder.
outletGreece, still without a government nine days after elections
with its political parties arguing about whether to rip up its bailout
programme, has already suffered five consecutive years of recession.
"But I am not certain whether things will continue at this speed," he
said. "Germany is faring better than the rest of the euro zone. But I
do not believe that it will continue at this speed."
A Reuters poll of 41 economists had forecast growth of 0.1 percent on
the quarter. The actual figure beat even the highest forecast for
expansion of 0.2 percent in the Reuters poll.
Strength was broadly based with both exports and domestic consumption
coach factory outletFrance,
in contrast, was held back by weak household demand and slowing
"There was no good surprise," said Philippe Waechter, chief economist
at Natixis Asset Management of the French data. "There was weak
consumption, no investment.<a
Germany is the exception to a euro zone picture which shows nearly all
its constituent parts back in recession or flirting with it.
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