German Economy drags down the Eurozone
The revelation that the Eurozone economy fell by a higher than expected 2.5% in the first quarter of 2009 has taken many economists and governments by surprise. However the like-for-like figure compared to the same quarter in 2008 shows an even more disappointing 4.6% reduction which is again worse than expected. However, the German economy is giving severe cause for alarm after it fell by 3.8% in the first quarter of 2009 and dragged the Eurozone down with it.
As we covered yesterday, a number of European counterparts appear to be at loggerheads with regards to policy decisions for the short to medium term. A number had asked for the quantitative easing program to be expanded but the EU Parliament itself has refused to give way on this particular issue. It is becoming apparent that internal bickering within the EU is not helping the economy and could leave long-term battle scars amongst EU members.
The decision to expand the EU to take in a number of Eastern European countries over the last few years has also been questioned as these countries were obviously not prepared for the severity of the ongoing recession. With more funding required across the board this is sure to be a difficult year for Eurozone members as a whole and individually.
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