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Why investors are shying away from France
France, which is becoming known as the "sick man of Europe", posted zero GDP growth for the second consecutive quarter. As a result, French President Francois Hollande called on the European Central Bank (ECB) to do more to tackle the risk of deflation and bring the euro to a more competitive level growth. He also said that France will not achieve the 1% growth observers were predicting three months ago.
But Paris-based Saxo Bank economist Christopher Dembik says the problem doesn't lie with the ECB, but with the French Government. He says: "How can we blame (investors) when the economic forecast for 2014 is depressing". Christopher also believes we can only expect economic reforms in France when the country's interest rate jumps to 3%. But for now, he doesn't think the Government is "not ready" to take key decisions.
Meanwhile, Germany recorded a surprise 0.2% GDP dip between April and June as foreign trade and investment, particularly in the construction sector, weighed on growth.
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