The latest GDP figures compiled by the EU’s statistics office Eurostat were released today showing that the embattled single currency nations have avoided sinking into recession.
The figures show that the zone stagnated, posting no growth but holding at 0%. Many individual Euro nations, such as Spain and Greece are facing deep recessions with many other nations hovering just above the abyss or having already re-entered recession.
Germany on the other hand proved that it was the engine that drives the Eurozone train wreck, posting far better than expected growth at 0.5%. It was this growth that pulled the entire zone above the negative growth line. Austria too continues to do well, highlighting the north south divide of the Euro nations.
Some economists were surprised at the figures warning caution. “Germany is leading the bloc, but this doesn’t mean we will have a strong rebound, austerity is not going away and southern European economies are really struggling. We are looking at stagnation to very mild growth in the year to come.”
It is still unclear whether austerity measures are having any positive impact on the Euro-zone. Many member nations are facing further cuts and rises in public disorder as a result. In Italy the government is considering bringing in the army to defend its tax offices. Several tax collectors have been attacked and offices burnt down by militants.
Elsewhere, Francois Hollande was sworn in as the new French president at the Elysee Palace. He will have his work cut out for him after the French economy posted 0% growth which will no doubt put him on a collision course with German Chancellor Angela Merkel.
In Greece the political situation remains uncertain after President Karolos Papoulias’s idea of implementing a technocratic government was expected to be refused by politicians.
The moderate Democratic Left party leader Fotis Kouvelis said; “I told the president that a government by technocrats or personalities would suggest the failure of politics, and raised my objection.”
The leftist parties seem to believe that if the country is forced back to the polls that it would have a good chance of winning a majority. As a result many European leaders and figures have begun to speak out over the possibility of a Greek exit, with some citing that such a move would prove disastrous for the Euro whilst others are saying it could be managed with minimum fuss.
The contrasting views of politicians and economists raises the question; ‘how are they going to sort out this mess?’
The Pound to Euro exchange rate is currently trading at 1.250
The Pound to US Dollar exchange rate is currently trading at 1.608
The Euro to US Dollar exchange rate is currently trading at 1.285
The Euro to Pound exchange rate is currently trading at 0.799
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