Latest figures for the eurozone economies indicate that it isn't just Germany that is in trouble, Holland had a bad first quater, and as predicted by bthe Chief Economist here at Bonobo Land, Italy is sinking into the mud:
The eurozone economy teetered on the brink of recession in the first three months of the year, according to figures released on Thursday that will intensify pressure on the European Central Bank to cut interest rates. Output in the 12-member zone was stagnant in the first quarter on the previous three months, with year-on-year growth of 0.8 per cent. Germany, the eurozone's largest economy, lapsed back into recession, with a contraction of 0.2 per cent in the first three months of the year compared with a decline of 0.03 per cent in the previous quarter. Economists said the figures painted a gloomy picture of the eurozone economy and created a com- pelling case for further interest rate cuts. With the global economy still fragile, disappointment has been mounting at the eurozone's failure to play its part in reviving growth.
The Netherlands, whose economy is closely linked with Germany's, contracted by 0.3 per cent - its second consecutive quarter of negative growth. Italy's economy, the eurozone's third largest, shrank at a quarter-on-quarter rate of 0.1 per cent in the first quarter of this year. It was Italy's weakest performance since the fourth quarter of 2001. The government recently cut its growth forecast for 2003 to 1.1 per cent from 2.3 per cent. Silvio Berlusconi, prime minister, said last weekend it was doubtful if Italy would achieve even 1 per cent growth. Together with Germany, Italy has been the eurozone's slowest-growing economy since the euro's launch in 1999. Italian growth last year was 0.4 per cent, the worst result since 1993.
Source: Financial Times