Germany grows, France stagnates while Greece sinks again
Germany, Europe’s largest economy, posted modest economic growth of 0.3 percent in the second quarter of the year, marginally beating forecasts. The Euro however was not significantly affected by the German GDP release. For France it was the third consecutive quarter of zero growth.
For the currency bloc’s members at the sharp end of its debt crisis, the picture is bleaker still. Figures released on Monday showed that Greece’s economy contracted by 6.2 percent in the second quarter, marginally better than the 7.0% forecast, and the slump is expected to persist as the government scrambles to secure billions in additional cuts to keep bailout funds flowing. Spanish and Italian bond yields have steadied since ECB President Mario Draghi pledged to do whatever it takes to save the euro zone. It is quite possible however that Madrid and Rome will seek help from the euro zone’s rescue funds and the ECB before the year is out.
The data for eurozone as a whole will be released later today although the central bank has already said it expects a mild contraction. A week of significant US indicators starts today with retail sales which are expected to return to growth after a 0.5% contraction in June.
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