Better Than Expected: German GDP Surges as Euro-Zone Split Widens
The German economy powered ahead in the first quarter with 0.5 percent GDP growth, far more than expected, while other countries in the euro zone stagnated or sank deeper into recession. The gap could could fuel calls for Chancellor Angela Merkel to soften her stance on austerity.
The German economy showed strong-than-expected growth in the first quarter, widening a gap with the rest of the euro zone that could fuel mounting calls for the continent to jettison austerity programs imposed by Chancellor Angela Merkel.
Germany owes its quick comeback to surging exports and buoyant consumer spending. "According to preliminary calculations the exports -- unlike imports -- rose at the start of the year," the Federal Statistics Office said in a statement. Economists polled by Reuters had on average forecast growth of 0.1 percent.
By contrast, the French economy stagnated in the first quarter with zero growth, putting Europe's second largest economy close to recession.
The figures come ahead of the first meeting between Merkel and France's new Socialist president, François Hollande, who has called for a renegotiation of the fiscal pact on budget discipline to add measures that boost economic growth.
'Leading the Bloc'
International pressure is building on Merkel to relax her strict stance on austerity in return for aid to stricken countries, and the German opposition Social Democrats said on Tuesday they would only support a parliamentary vote on the fiscal pact if growth elements were added.
Data for the euro zone released on Tuesday showed zero growth in the 17-nation bloc in the first quarter, slightly beating forecasts for a 0.2 percent drop and thereby dodging a recession -- thanks to the surprise German growth.
Italy's economy contracted 0.8 percent in the first quarter, the third consecutive quarterly decline and the steepest for three years, according to preliminary data that were weaker than expectations. The Dutch economy also shrank for a third consecutive quarter, shrinking 0.2 percent.
Data released two weeks ago showed Spain in recession. And Greece is in its fifth consecutive year of recession.
cro -- with wire reports
© SPIEGEL ONLINE 2012
All Rights Reserved
Reproduction only allowed with the permission of SPIEGELnet GmbH