The data just released from Eurostat shows that both the Euro-Zone and the EU27 grew gross domestic product in the second quarter at a rate of .3%. While growth is positive quarter to quarter, the year-over-year numbers are still negative. As the table below shows, the trend of strength is still in place with countries like Germany and France pulling the majority of gains while the likes of Greece, Cyprus, and Spain continue to be a drag on economic activity.
The positive GDP numbers, combined with the recent jobless data that showed an end in rising unemployment, should continue to fuel the talk of green shoots some in the financial media have been mentioning. However, the chief economist for HSBC, Stephen King still doesn’t appear to be sold on the notion of a saved Euro-Zone.
“The growth rates we’re currently seeing are still far too low and we’re seeing an increasing gap between financial and political hope on the one side and economic reality on the other. The problem is the gap between the growth that’s being delivered and the growth that’s required to make the fiscal numbers add up in the medium term.”