Econintersect: France and Germany dominate the Eurizine economically, with almost half (49%) of the zone GDP in 2011 and most likely more than half in 2012. Both 
countries saw significant contractions in GDP for the fourth quarter 2012, Germany by 0.6% (2.4% annual rate) and France by 0.3% (1.2% annual rate). Both results were worse than had been expected.
These disappointing numbers indicate that Europe is likely slipping into or already in at least a mild recession that could extend through the first half of 2013, although there reports of many opinions that Germany will regain GDP growth in the first quarter 2013.
Germany has experienced the worst GDP growth quarter since the depths of The Great Recession in 2009. The biggest disappointment was the decline of German exports, falling at much faster rate than did imports.
For France the fourth quarter was the third in 2012 with GDP contraction. Revisions to data for Q1 and Q2 have resulted in both quarters now having negative growth. If there are minor revisions yet to come for France’s third quarter GDP growth of only 0.1% it could yet come to pass that the country has been in a recession for the entire year 2012.
European stock markets opened flat to down across the board after the GDP news was announced.
Sources:
- German, French economies contract in fourth quarter (Annika Breidthardt and Vicky Buffery, Reuters)
- European Markets Decline on Disappointing Eurozone GDP Data (Geetha Pillai, International Business Times)
