Eurozone between a rock and a hard place!

Following 18 months of recession in Europe, the anticipated publishing of CPI and GDP data last week spurred hope that signs of change will finally unveil.

The French GDP surprised for the betteron Wednesday, mostly due to a recovery of the local industrial production, and one could have hoped that this is a sign of things to come.

Later that day, it was evident that the improvement in France did trickle down to the Eurozone’s figure.

However, the positive French figures were no indication for industrial production in neighboring countries as the Eurozone’s GDP indicated only a 0.3% rise over the previous quarter.


Eurozone between a rock and a hard place

Eurozone between a rock and a hard place

Positively, this is the first time in nearly two years in which an economic expansion is recorded at the Eurozone’s GDP, although it is hard to call a 0.3% rise “back to normal”.

At the CPI front, things were not much better as the Eurozone’s CPI (published on Friday) indicated deflation with a -0.5% month over month decrease, raising concerns of weak demand.

The meaning of that data is that on the one hand, the Eurozone leaders are reluctant to increase spending in order to boost the economy, as the austerity measures are essential to restrain debt to GDP levels.


On the other hand, with unemployment at 12.1% on the Eurozone as a whole, and around 26% in countries like Greece and Spain, it is hard to imagine that the economy would be able to bootstrap itself.

It may be that leaders of the EU would like to see the global economy improving, thus helping it pull their own economy out of the mud.

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