European GDP Shrunk By 0.2%, But That's Not Even The Worst Part

European GDP shrunk by 0.2% in Q2.

From Eurostat:

GDP fell by 0.2% in both the euro area1 (EA17) and the EU271 during the second quarter of 2012, compared with the previous quarter, according to flash estimates published by Eurostat, the statistical office of the European Union.

In the first quarter of 2012, growth rates were 0.0% in both zones. Compared with the same quarter of the previous year, seasonally adjusted GDP fell by 0.4% in the euro area and by 0.2% in the EU27 in the second quarter of 2012, after 0.0% and +0.1% respectively in the previous quarter.

But the worst part is, the gap between ‘core’ countries and peripheral countries isn’t going away.

Says Roubini economist Megan Greene:

image

Photo: Megan Greene

Indeed, Germany grew 0.3% and the Netherlands grew 0.2%, whereas Italy shrunk 0.7% and Portugal fell 1.2%.

With this kind of growth divergence, it’s still hard to find a harmonized policy that works for everyone. Germans still like the status quo.

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