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| Version 6 | Version 7 |
|---|---|
| France and Germany exit recession | France and Germany exit recession |
| (10 minutes later) | |
| The French and German economies both grew by 0.3% between April and June, bringing to an end year-long recessions in two of Europe's largest economies. | The French and German economies both grew by 0.3% between April and June, bringing to an end year-long recessions in two of Europe's largest economies. |
| "The data is very surprising. After four negative quarters France is coming out of the red," said French Finance and Economy Minister Christine Lagarde. | "The data is very surprising. After four negative quarters France is coming out of the red," said French Finance and Economy Minister Christine Lagarde. |
| Few analysts expected the economies to come out of recession this early. | Few analysts expected the economies to come out of recession this early. |
| But economic activity in the eurozone fell by 0.1%, showing the region as a whole is still in recession. | But economic activity in the eurozone fell by 0.1%, showing the region as a whole is still in recession. |
| The contraction was a marked improvement on the 2.5% drop recorded in the first three months of the year, and was smaller than economists had expected. | The contraction was a marked improvement on the 2.5% drop recorded in the first three months of the year, and was smaller than economists had expected. |
| Both the French and German economies last grew in the first quarter of 2008. | Both the French and German economies last grew in the first quarter of 2008. |
| 'State umbrella' | 'State umbrella' |
| The German economy, Europe's largest, contracted by a revised 3.5% in the first three months of the year. | The German economy, Europe's largest, contracted by a revised 3.5% in the first three months of the year. |
| And while exports rose 7% in June, the fastest pace in nearly three years, few analysts had expected a return to overall economic growth so quickly. | And while exports rose 7% in June, the fastest pace in nearly three years, few analysts had expected a return to overall economic growth so quickly. |
| The country's Federal Statistics Office said that household and government expenditure had boosted growth. | The country's Federal Statistics Office said that household and government expenditure had boosted growth. |
| CASE STUDY Ulf Sauerwald, chief executive of plastics manufacturer Wirthwein Nauen, says his business is growing. | CASE STUDY Ulf Sauerwald, chief executive of plastics manufacturer Wirthwein Nauen, says his business is growing. |
| "Turnover in the whole group increased from 15 to 20% at the start of the year. We've had major new orders coming in, have developed new products in the car sector and are planning to open a new factory in Spain." | "Turnover in the whole group increased from 15 to 20% at the start of the year. We've had major new orders coming in, have developed new products in the car sector and are planning to open a new factory in Spain." |
| But the workers on the factory floor are not seeing a recovery yet. | But the workers on the factory floor are not seeing a recovery yet. |
| "My staff... don't get paid overtime and they don't buy expensive stuff like cars," says Christopher Schmidt. | "My staff... don't get paid overtime and they don't buy expensive stuff like cars," says Christopher Schmidt. |
| It added that imports had declined "far more sharply than exports, which had a positive effect on GDP growth". | It added that imports had declined "far more sharply than exports, which had a positive effect on GDP growth". |
| Analyst reaction to Germany's recovery was mixed. | Analyst reaction to Germany's recovery was mixed. |
| "The recession has ended, and it has ended sooner than we all thought. We expect to see growth of 1% in the third quarter, which is very strong for Germany, and I wouldn't rule out the chance of even better growth," said Andreas Rees at Unicredit. | "The recession has ended, and it has ended sooner than we all thought. We expect to see growth of 1% in the third quarter, which is very strong for Germany, and I wouldn't rule out the chance of even better growth," said Andreas Rees at Unicredit. |
| Others were more circumspect, arguing that the economy is over-reliant on government stimulus packages. | Others were more circumspect, arguing that the economy is over-reliant on government stimulus packages. |
| "What we're seeing is the impact of fiscal policy. The question is how lasting [the recovery] will be. There are lots of problems we haven't solved. In particular, the banking sector is still reliant on the state umbrella," said Jens-Oliver Niklasch at LBBW. | "What we're seeing is the impact of fiscal policy. The question is how lasting [the recovery] will be. There are lots of problems we haven't solved. In particular, the banking sector is still reliant on the state umbrella," said Jens-Oliver Niklasch at LBBW. |
| "As long as it's not clear that the bank's capital base is robust, we can't assume that the crisis is over." | "As long as it's not clear that the bank's capital base is robust, we can't assume that the crisis is over." |
| Consumer spending | Consumer spending |
| France's economy had contracted by a revised 1.3% in the first quarter. | France's economy had contracted by a revised 1.3% in the first quarter. |
| Ms Lagarde said that consumer spending and strong exports had helped to pull France out of recession. | |
| "What we see is that consumption is holding up," she said. | "What we see is that consumption is holding up," she said. |
| Official figures showed that household consumption rose by 0.4% in the second quarter. | Official figures showed that household consumption rose by 0.4% in the second quarter. |
| She said government incentive schemes for trading in old cars, together with falling prices, were helping consumers. | She said government incentive schemes for trading in old cars, together with falling prices, were helping consumers. |
| Foreign trade contributed 0.9% to the GDP figure - a "very strong impact", said Ms Lagarde. | |
| "[The figures are] a positive surprise, as many people were expecting slightly negative numbers," said Marie Diron at Oxford Economics. | "[The figures are] a positive surprise, as many people were expecting slightly negative numbers," said Marie Diron at Oxford Economics. |
| But she warned that growth is "still very fragile". | But she warned that growth is "still very fragile". |
| "Investment is down, we still have surprisingly low stocking, and growth is boosted by the fact that imports fell sharply," she added. | "Investment is down, we still have surprisingly low stocking, and growth is boosted by the fact that imports fell sharply," she added. |