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Mixed signals for euro zone recovery

Friday, May 13, 2016 - 01:40

New euro zone data shows German growth powering ahead - but with the wider euro zone still weak and consumer prices on the slide, is a recovery truly on track? David Pollard reports.

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Europe could be said to be in need of a little unity. And this Berlin building houses a new exhibition to promote it. Europe 360 degrees, it's hoped, will bring Europeans together - to talk. (SOUNDBITE) (German) GERMAN CHANCELLOR ANGELA MERKEL, SAYING: "The larger the task for Europe becomes the more we need to involve its citizens. We need to debate things with them. And I think this can become a place for mutual enrichment. But new growth figures show Germany powering ahead at its fastest in two years. While the euro zone languishes - its GDP revised down. Those numbers perhaps stirring old fears of divides within the euro zone economy. And not just between member states. (SOUNDBITE) (English) WORLD FIRST, CHIEF ECONOMIST, JEREMY COOK, SAYING: "We've seen, I think, 20 consecutive months of growth in German industrial production. So that's certainly a bright spot. You'd have to say on the negative side of things, we're still seeing consumer confidence and investor confidence remain particularly weak." A problem for all is low inflation. German consumer prices down 0.4 percent on the month - others also negative over the year. What should the ECB and Mario Draghi make of such a mixed menu? (SOUNDBITE) (English) WORLD FIRST, CHIEF ECONOMIST, JEREMY COOK, SAYING: "There's still a lot of hard road to be overcome, that the policy of the ECB needs time, that if everything keeps running in this direction, then that's obviously good news, but to be prepared for a dip once again." And, perhaps, to prepare for a major obstacle on that road. One report saying that by the end of next year, a Brexit, should it happen, could cost 45 billion euros to the German economy alone.

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Mixed signals for euro zone recovery

Friday, May 13, 2016 - 01:40