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Growth in Europe: Why now?
GDP growth in France, Germany and the Eurozone as a whole has beaten expectations and Europe is officially out of its longest recession in decades. But why has it happened now? One of the reasons is that private consumption is up strongly. But Saxo Bank's Head of Macro Strategy, Mads Koefoed, says that's something of a concern. Growth in the Eurozone was up 0.3% from the previous quarter, 0.7% higher in Germany and 0.5% in France.
Mads notes that austerity had little effect in the second quarter and public spending in France was higher. He has doubts the country will achieve its deficit target of 3% either this year or in 2014. There were also some technical reasons for the positive growth readings. Because of this, Mads believes the good news can't be sustained. He expects the eurozone to have no growth at all in the third quarter and France may even contract. However, he still expects Germany's position to improve further.
01:24 minutes
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