Forex Notes

Restoring Europe Virtually Stalled Because Of Stagnation In Germany

In 4 square. Europe's economic recovery almost stalled on the ground that has been largely due to the situation in Europe's biggest economies - Germany, where cost reduction and investment has led to a sudden complete lack of quarterly growth for the period.
E-16's GDP grew by only 0.1% quarter / quarter against 0.4% in the 3 quarter. and forecasts of economists +0.3%.

Previously published reports on individual countries showed that Germany's economy has recorded a 4 square. zero growth. Meanwhile, many members of the eurozone slowdown continues: in Italy's GDP fell by 0.2%, while in Greece's economy declined by 0.8%, continuing the commitment reached in the 3 quarter. decrease by 0,5%. Spain's GDP has been declining for seven consecutive quarters. The situation is slightly rescued the situation in France, where the GDP over the same period rose above forecasts at 0.6% thanks to strong consumer spending.

In annual terms, GDP fell in the eurozone 4 square. 2,1%, beating forecast of -1.9%.
Overall, the region's economy in 2009 decreased by 4,0%.
The breakdown of GDP components will be known only next month.

It is believed that uncertainty about the prospects of the economy will force the ECB to keep rates at record low 1.0% to 4 square. 2010
Analysts believe that any recovery will occur weakly in connection with the negative influence of high unemployment in the region, forcing consumers to limit themselves to spending. Recall that in December the rate b / d in the F-16 reached a maximum in August 1998 mark of 10%.

European governments were in a difficult situation, because the sword of Damocles over the region faces the threat of proliferation of the debt problems of Greece - and this is the initial stage of phasing out incentives, launched earlier to get the economy out of recession.
Now restore threatened loss of momentum, and the Greek distemper inflate profitability of southern European bonds.

"Last year, market demand incentives, and now they want from governments struggle with deficits," - notes Silvian Breuer, chief economist at Natixis. "There is a danger that an aggressive budget cuts hit economic expansion. We are still far from self-sustaining recovery."