- Michel Sapin, French Finance Minister
Time is ticking, the Eurozone is falling further into yawning abyss and there are still no actions that would effectively save the Euro bloc from the downward spiral and bring it back to life. The recent data has not provided any positive surprise; instead it has caused even more headache to ECB officials. The German economy, European growth engine that has been losing momentum recently, contracted 0.2% in the June quarter following the 0.7% growth in the first quarter, with net trade being the main drag on growth, as import growth outpaced export. Meanwhile, France, the Euro region's second-biggest economy failed to post any growth for a second straight quarter in the three months through June being held back by weak investment, which offset a rise in consumer spending. Exports growth also declined to zero in the Q2 and foreign trade was a negative contributor to GDP growth. A separate report also showed Italy's economy also contracted by 0.2% in the second quarter as well.
Thus, the top-three Euro zone economies are mired into contraction spiral adding pressure on policy makers ranging from European Central Bank officials to government politicians to bolster growth in a region, as the Eurozone recorded a zero growth in the second quarter, while inflation remained unchanged at 0.4%. The feeble recovery leaves the 18-nation bloc lagging behind other advanced economies such as the U.S. and the U.K.
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