The recession has officially come to an end in France, Germany, and more generally in Europe. But for the economists this does not mean a return to economic growth.
One might have thought that, with François Hollande, realism would get the upper hand, all the more so as the 0.5% growth mainly rests on 0.4% growth in household consumption … which is partly linked to bad weather, the lousy spring having made energy bills balloon. Growth without jobs or investment: France continued to destroy jobs – 27,800 in the same period, as against 8,300 in the preceding quarter. The government has not commented on that figure. According to Eric Heyer, an economist at the French institute for the economic situation, “lasting economic recovery can only come if there is investment. Today, there isn’t any.” Investment has indeed continued to fall, even though it is at a slower rate (a 0.5% drop in the second quarter, as against a 1% drop in the first quarter).
The same persuasive efforts are being made in Germany. With 0.7% growth, that is, 0.1% more than expected, and five weeks before the parliamentary elections, the German minister of the economy jumped at the opportunity. “Germans have every reason to be optimistic as to the future,” said Philipp Rösler. “We must continue on the same path that, until now, has brought success: solid finances, competitive companies, and a policy that opens up margin for maneuver,” tax breaks, the pet subject of his liberal party (FDP).
With all due respect to the minister and to German chancellor Angela Merkel, here again, the extent of the bounce back seems to be linked to unusual climate conditions and to the housing bubble, prices having rocketed by 10% since 2000 according to the minister of the economy. While the details of this growth will not be known before August 23, these springlike figures are partly to be explained by an adjustment effect, notably in the building trades, which had been sluggish for months due to a harsh winter. Moreover, the minister has not revised his 0.5% growth prediction for 2013 as a whole.
Countries that remain in the red.
According to Eurostat, the gross domestic product (GDP) of the 27 EU countries grew by 0.3% compared to the first quarter, a figure that is slightly better than the 0.2% growth expected by the economists. But four countries are mainly concerned by this recovery: France and Germany on the one hand, Finland and Portugal on the other. On the flip side, Italy, Spain, Greece and the Netherlands are still in recession. But this is enough for the European Commission’s propaganda: “A lasting recovery is now within reach, but only if we continue our response to the economic crisis on all fronts,” insisted the European commissioner on economic affairs, Olli Rehn, in his blog.