MercoPress. South Atlantic News Agency

Germany, France and Italy spear EU 0.2% contraction in 2Q

The economy of the euro zone contracted 0.2% in the second quarter after growing 0.7% the previous quarter, according to the latest EU data, which confirmed earlier estimates.

On a 12-month comparison, the euro zone economy grew 1.4% in the second quarter, down sharply from 2.1%, the Eurostat data agency said in a final calculation. Meanwhile, the broader 27-nation European Union economy stalled with zero growth after expanding 0.6% in the first three months of the year. Eurostat had previously estimated that the economy had contracted 0.1%. Over one year, the EU economy grew 1.7%, slowing from a rate of 2.3% in the first quarter, Eurostat said, revising up a previous estimate of 1.6%. In the second quarter of 2008 and among the Member States for which seasonally adjusted GDP data are available, Slovakia (+1.9%) recorded the highest growth rate compared with the previous quarter, followed by Poland (+1.5%) and Lithuania (+1.0%). However the four major EU economies performance in the second quarter was disappointing: Germany -0.5%; France -0.3%; Italy -0.3%; UK, 0%. Spain managed + +0.1% and Ireland confirmed recession with -0.5%. In the second quarter of 2008, household final consumption expenditure decreased by 0.2% in the Euro area and by 0.1% in the EU27 (-0.1% and +0.1% respectively in the previous quarter). Investment decreased by 1.0% in both the Euro area and the EU27 (after +1.4% and +0.8%). Exports decreased by 0.2% in the Euro area and by 0.3% in the EU27 (after +1.8% in both zones). Imports decreased by 0.5% in both the Euro area and the EU27 (after +1.8% and +1.7%). Among the main trade partners of the EU, GDP grew by 0.7% in the US in the second quarter of 2008 (+0.2% in the previous quarter), while in Japan GDP decreased by 0.7% in the second quarter of 2008 (+0.7% in the previous quarter). Compared with the second quarter of 2007, GDP rose by 2.1% in the US (+2.5% in the previous quarter) and by 0.8% in Japan (+1.2% in the previous quarter).