- Lloyds Bank global research team
Germany, Germany, Germany. This country is the main driver of the 18-nation bloc's growth and has the biggest influence on the course chosen by the whole bloc. This week German Federal Constitutional Court approved the Eurozone's permanent bailout mechanism, saying it is completely in line with the nation's constitution. Court's comments about the 500 billion euros rescue find were vital to get the bloc's post crisis firewall in place. A decision was widely anticipated, as ruling from September 2012 rejected thousands of constitutional complaints that were aimed at blocking the creation of the ESM.
While this is an important step for assuring the 18-nation bloc' economic stability, countries are sending worrying signs once again. Hence, German ZEW economic sentiment continued a steep decline this month, extending its longest streak into what is already three-month long. A gauge of investors' mood fell to 46.6 in March from 55.7 a month earlier and falling short of market's expectations of 52.8. A measure of current conditions stood at 51.3 in the same period, climbing from 50.0. Despite the deterioration and a move in contraction zone, a pickup in current conditions is bolstering the case the economy is on the path to recovery, while global headwinds like geopolitical tensions can derail economic growth.
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