Although the German economy continued to report growth in the second quarter, that was not enough to save the eurozone as a whole from shrinkage.
Reuters reported Tuesday that Germany’s economy managed to grow 0.3% in Q2, and even France managed to remain flat rather than contracting, but the two together were not enough of a bright spot to keep afloat the economy of the 17-country bloc. The eurozone contracted by 0.2%, and looked to promise further gloomy news as Germany’s ZEW sentiment index, which acts as a predictor rather than looking at results achieved, dropped for the fourth month in a row.
Austria and the Netherlands grew 0.2%, while Finland shrank 0.7%. Portugal shrank 1.2%, while Spain contracted 0.4% and Italy 0.7%
After a flat Q1, the eurozone’s drop in Q2 indicated that the struggle is not over to contain the fiscal woes of the group, and economists expect that the downward trend will continue.