According to researchers at Capital Economics, with peripheral Europe still crippled by high unemployment and debt, and Germany still reticent to quicken steps towards banking union, the currency bloc is not out of the woods. Yesterday’s announcement that German exports had risen below expectations added weight to the argument. Outward trade rose by one per cent between July and August, with 1.5 per cent expected.
Capital Economics’ quarterly report commented on the situation following the Germany election: “Germany’s steady recovery looks set to continue. But the new government is unlikely to bring about either a marked rebalancing of the economy or a softer stance towards the Eurozone’s periphery.”
New figures yesterday also suggest Spain’s factories are yet to see any boost from the end of recession in the euro area. The embattled Mediterranean economy’s calendar-adjusted industrial output level was down two per cent in August, compared to 12 months earlier.