When a bloc of 18 nations comes together with a wide range of economic profiles, it is obvious that progress will not be uniform, particularly following the twin shocks of the Global Financial Crisis and the European Sovereign Debt debacle. Even so, analysts have been disappointed by the modest 0.2% growth that the Eurozone managed in Q1 2014.
Speaking to the BBC, Chris Williamson of Markit noted: "Although the economy has now grown for four consecutive quarters, the pace has failed to accelerate to anything other than lacklustre over this period. The data therefore add to the likelihood of the ECB taking action at its June meeting to inject more stimulus into the economy."
Unemployment within the Eurozone stands at an average of 11.8%, but is very heterogeneous with Austria and Germany enjoying relatively low levels of unemployment at 4.9 and 5.1% respectively whereas in Spain and Greece more than a quarter of the workforce is idle (25.3 and 26.7% respectively). The unemployment levels reflect how well (or not) recovery is going in the member states.
In Germany, the Q1 GDP figure was 0.8% whilst beleaguered Spain managed to expand its economy by 0.4%. The Spanish figure is positive, at least, but a much stronger pace of growth is needed to make any significant impact on unemployment. But whilst Germany may have led the charge, the second and third largest Eurozone economies dragged their heels. French growth was flat whilst the Italian economy contracted by 0.1% in Q1.
France’s lacklustre performance was blamed on weak consumer spending and business investment. French industrial output has now returned to pre-crisis levels (in other words, it has lost six years of growth), but Italian output is still 9% below the level at which it stood before the Global Financial Crisis hit.