European economies unhappy in their own way

The Eurocrisis typhoon may have engulfed the entire currency union area, but it sets a different pace for each one of the victims as it spirals. The core-periphery divide is showing up again this week in somehow reverse edition: while “there are signs that the southern European economies are becoming more stable,” as analysts at BBolsa in Madrid put it, the International Monetary Fund publicly fretted over Germany losing steam.

Italy’s GDP from April to June fell only -0.2%, that is almost half a percentage point less than during the first quarter of the year (-0.6%), and feared better than the -0.4% forecast by capital markets. Year-on-year, the drop was two-tenths of a percentage point lower, too, even if still in negative territory with -2%. This is what observers call moderate negative growth.

Or is it wishful thinking about the periphery’s real prospects of enjoying its definitive first green shoots? Adding to the Italian not-as-bad-as-thought data, several studies coincided in giving Spain a positive GDP growth rate in the third quarter of 2013.

According to BBVA Research in its latest Spanish Economic Outlook paper, Spain’s GDP could be 0.1% amid a scenario in which activity begins to gain strength. Even if BBVA analysts point out that “global growth will accelerate as developed economies recover,” they confidently assure that the Spanish economy will “bottom out in 2013 led by a smaller negative contribution of internal demand and export growth.” Available information would announce the start of a gradual expansion, experts conclude, and although the economy will remain in contraction territory this year, it would grow by 0.9% in 2014.

At Flores de Lemus institute, analysts said Spain will return to GDP growth but in a “very slow motion”. We shouldn’t expect quarterly registers above 0.2% until 2015.

Yet, what sounds optimistic for Italy and Spain can dampen the picture of Germany as almost unassailable European economic engine. The IMF alerted that the German over-reliance on exports would cut down its growth and the country could be heading towards stagnation. As proof, the Fund mentioned the worse-than-expected results of German companies Siemens and BASF, both of which have been affected by their large exposures to the industrial sector in emergent markets.