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| Version 4 | Version 5 |
|---|---|
| Italian economy stagnates as German growth slows | Italian economy stagnates as German growth slows |
| (about 2 hours later) | |
| Italy's economy failed to grow between April and June as the country struggled with its creaking banking sector. | Italy's economy failed to grow between April and June as the country struggled with its creaking banking sector. |
| GDP growth shrank to 0% in the second quarter compared to 0.3% in the first quarter. | GDP growth shrank to 0% in the second quarter compared to 0.3% in the first quarter. |
| Germany's economy also slowed in the second quarter, albeit less markedly than had been expected. | Germany's economy also slowed in the second quarter, albeit less markedly than had been expected. |
| Europe's largest economy expanded by 0.4%, down from 0.7% in the first quarter, but above forecasts of 0.2%. | Europe's largest economy expanded by 0.4%, down from 0.7% in the first quarter, but above forecasts of 0.2%. |
| Overall, a second estimate of GDP across the eurozone confirmed that growth halved to 0.3% from 0.6% in the first three months of the year. | Overall, a second estimate of GDP across the eurozone confirmed that growth halved to 0.3% from 0.6% in the first three months of the year. |
| GDP also fell across the 28-nation European Union to 0.4% from 0.5% between the first and second quarters. | GDP also fell across the 28-nation European Union to 0.4% from 0.5% between the first and second quarters. |
| Italian banks | Italian banks |
| In Italy, analysts had expected GDP to grow by between 0.1% and 0.3%. | In Italy, analysts had expected GDP to grow by between 0.1% and 0.3%. |
| Italian Prime Minister Mario Renzi, is battling to reduce the bad debt in its banking sector, which is currently buried under €360bn worth of bad loans. Monte dei Paschi di Siena, Italy's third largest bank and the world's oldest lender, is saddled with €46.9bn of bad debt. | |
| Alberto Bagnai, economic policy professor at the University of Chieti-Pescara, said: "There is no way to solve the banking problem without economic growth. If the whole nation doesn't start earning more it can't pay back its debts - public or private." | |
| The government expects the country to grow by 1.2% this year. However, the International Monetary Fund recently reduced its economic growth from 1.1% to 1%. | |
| The new data means that growth in the Eurozone's three biggest economies - Germany, France and Italy - has either slowed or completely stalled between the first and second quarters. | The new data means that growth in the Eurozone's three biggest economies - Germany, France and Italy - has either slowed or completely stalled between the first and second quarters. |
| France recorded no growth between April and June after GDP rose by 0.7% in the first quarter, boosted by business from the Euro 2016 football tournament. | |
| In contrast, Greece reported a rare rise in GDP - which increased by 0.3% compared to a 0.1% fall in the first quarter. Holidaymakers are choosing the likes of Greece and Spain over politically volatile Turkey. | In contrast, Greece reported a rare rise in GDP - which increased by 0.3% compared to a 0.1% fall in the first quarter. Holidaymakers are choosing the likes of Greece and Spain over politically volatile Turkey. |
| Nikos Magginas, an economist at National Bank of Greece, said: "Domestic demand was probably better than expected because of tourism. The numbers point to a positive turnaround in the economy in the second half of the year." | Nikos Magginas, an economist at National Bank of Greece, said: "Domestic demand was probably better than expected because of tourism. The numbers point to a positive turnaround in the economy in the second half of the year." |
| Europe's engine room | |
| In Germany, exports and consumer spending were stronger than forecast but investment in construction and machinery slowed. | In Germany, exports and consumer spending were stronger than forecast but investment in construction and machinery slowed. |
| Commenting on "Europe's engine room", Carsten Brzeski, economist at ING-DiBa, warned that Germany must increase investment to support growth. | |
| However, he said it could be hampered by ``increased uncertainties after the Brexit vote, continued structural weaknesses in many eurozone countries and a renewed global slowdown''. | However, he said it could be hampered by ``increased uncertainties after the Brexit vote, continued structural weaknesses in many eurozone countries and a renewed global slowdown''. |
| Joerg Zeuner, economist at KfW, said: "The decision to leave the EU will hit the British economy, and the slowdown will spread to Germany through muted exports. | Joerg Zeuner, economist at KfW, said: "The decision to leave the EU will hit the British economy, and the slowdown will spread to Germany through muted exports. |
| "The UK is an important market, especially for German car makers, but also for our chemical and pharmaceutical industries." | "The UK is an important market, especially for German car makers, but also for our chemical and pharmaceutical industries." |
| New data also revealed that German inflation rose in July, up by 0.4%, fuelled by rising food and services prices. | New data also revealed that German inflation rose in July, up by 0.4%, fuelled by rising food and services prices. |
| Inflation was tempered by the falling cost of energy and clothing. Destatis, Germany's statistics office, said stripping out energy, inflation would have been 1.3% in July. | Inflation was tempered by the falling cost of energy and clothing. Destatis, Germany's statistics office, said stripping out energy, inflation would have been 1.3% in July. |