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News Link • Economy - International

German Economy Contracts, France Stagnates, Italy in Recession...

• Mike Shedlock

The recovery in Europe, not that there was ever much of one, is now over. As expected in this corner, Germany Contracts and France Stagnates in Second Quarter.

The data from the currency bloc's two largest economies came as the embattled French government said the disappointing growth meant it would miss its budget deficit this year and halved its gross domestic product forecast for 2014.

Germany's economy, which provides more than a quarter of the euro area's output, shrank 0.2 per cent between April and June, according to official figures.

Both figures missed forecasts and, with Italy back in recession, none of the region's three largest economies grew at all in the spring.

French finance minister Michel Sapin said that economic growth this year would now be 0.5 per cent, half of the previous official estimate of 1 per cent. That would also mean missing its budget-deficit target of 3.8 per cent of economic output this year, a level it had set as a necessary stepping stone to achieving the EU's ceiling of 3 per cent of output by 2015.

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