By Nick Mann | 15 May 2012
The eurozone has narrowly avoided entering recession, with growth flat in the first quarter of 2012, according to the latest figures from Eurostat.
An identical performance was recorded for the EU as a whole in the estimate, issued today by the European Union’s statistical service.
The figures represent an improvement from the 0.3% contraction in gross domestic product reported for both the eurozone and the EU in the previous quarter.
But Europe’s economic performance continues to lag behind that of the US, which recorded 0.5% growth in the first quarter of 2012. US GDP in the first three months of the year was 2.1% higher than in the same period a year earlier, compared to 0.1% for the EU as a whole and a flat 0% for the eurozone.
Among Europe’s largest economies, Germany recorded 0.5% growth for the first quarter of 2012, while France’s economy slipped from 0.1% in the previous quarter to 0%. Finland and Latvia had the strongest GDP growth in the period, with 1.3% and 1.1% respectively.
The UK is one of eight EU economies in recession, having recorded two or more quarters of negative growth. The others are the Czech Republic, Spain, Italy, Cyprus, the Netherlands, Portugal and Romania.
While the Eurostat figures do not include Greece, separate figures also issued this morning by the Greek Statistical Service reveal that its GDP for the first quarter of 2012 has shrunk by 6.2 percentage points since the same period in 2011.
The latest blow to market confidence in Greece came as talks continued in Athens in a bid to establish a new government, following elections earlier this month which saw major gains for anti-austerity parties. Greek president Karolos Papoulias is reportedly trying to establish a ‘government of technocrats’ after leading parties failed to establish a coalition administration.
Speaking after a meeting last night of the Eurogroup of eurozone finance ministers, European Commission vice president Olli Rehn said the future of Greece lay with its politicians complying with the austerity measures needed for it to receive bailout funds from the EU and International Monetary Fund.
He also stressed support for Greece remaining in the euro. ‘It is clear that we want Greece to stay in the euro and return to sustainable growth and sound public finances in line with the programme of economic reform and fiscal adjustment,’ he said.
New French president François Hollande is also expected to discuss the impasse in Greece and the wider eurozone crisis when he flies to Berlin after his inauguration to meet German prime minister Angela Merkel later today.
