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Both Germany and France saw their economies contract at the end of 2012
Newly released figures show that Germany, the Eurozone’s largest economy, contracted by 0.6% during Q4 of 2012, whilst France’s saw a 0.3% contraction during the same period.
Germany and France’s GDP figures reflect wider problems within the Eurozone and Europe, with Spain, Portugal, Italy, the Netherlands and the non-euro member United Kingdom also recording economic contraction. As a currency zone, the seventeen euro economies collectively saw a GDP contraction of 0.6%.
Attributed to a fall in exports, the German government’s statistics office stated that “Comparatively weak foreign trade was the decisive factor for the decline” and that the “exports of goods declined significantly more than imports of goods”.
The contraction in French GDP has led to the country’s Finance Minister, Pierre Moscovici, to suggest that the 0.8% growth forecast for 2013 may need to revised, saying that the government note’s “that the figure for 2012 is not good, around zero, and so we also know that growth for 2013 will have to be re-thought”.
Mr Moscovici rejected the idea that France should follow similar policies to the UK government, which has sought to reduce national debt and deficit through spending cuts, and argued that he did not wish to “condemn the country to recession” and add “”austerity to the difficulties of today”.
The UK economy also contracted by 0.3% in the fourth quarter of 2013, but is expected to report growth in Q1 of 2013, whilst the Italian economy, which has been in recession since 2011, contracted by a further 0.9%.
