Euro zone set to report solid growth, for a change

Sun May 10, 2015 4:17am EDT
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By Ross Finley

LONDON (Reuters) - With optimism building that the United States is already recovering smartly from another horrible start to the year, focus will shift this week to reports that may show the euro zone is finally shaking off half a decade of torpor.

The 19-member currency union has been a millstone around the global economy's neck ever since the financial crisis spawned a sovereign debt crisis particular to Europe.

China's economy is no longer driving growth and other emerging markets like Brazil are grappling with disappointing performance in the run-up to what most expect will be the first U.S. interest rate hike in nearly a decade later this year.

So it is all the more crucial for more than just its citizens suffering from years of high unemployment and feeble or no growth that Europe is able to pick up some of the slack.

Eurogroup finance ministers will meet on Monday to discuss once more Greece's sclerotic progress in implementing economic reforms in exchange for bailout funds as it gets dangerously close to running out of cash. [ID:nL5N0XX2QJ]

But policymakers have already played down hopes of major progress early next week, which leaves the spotlight on the first read of how quickly the euro zone and its component economies performed at the start of the year.

For the first time in many years, it seems clear that the euro zone performed not only better, but far better than the U.S., which almost certainly suffered a mild economic contraction in January-March.

Euro zone growth is forecast at 0.5 percent, according to a Reuters poll of economists, which would even put it ahead of Britain, which consistently has been leading the biggest economies in Europe, not only in growth but employment.   Continued...

Inflated euro sign is seen outside the new headquarters of the European Central Bank (ECB) in Frankfurt, January 22, 2015.  REUTERS/Kai Pfaffenbach