Eurozone struggles to keep pace with Germany

Eurozone GDP data for the first quarter of 2014, published last week, were doubly disappointing. First, growth came in well below expectations at just 0.2%, half the forecast rate.

The eurozone economy emerged from its second major recession in quarter two last year. However, the pace of recovery has been weak, with GDP growth averaging just 0.2% in the final three quarters of 2013. Disappointingly, there was no pick-up in the pace of growth in early 2014.

Second, the only major economy in the eurozone that is expanding is Germany. Elsewhere, economies are either stagnant or continue to contract. Thus, the recovery in the eurozone is uneven and weak.