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The German motor

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via The German motor.

The euro area is ever-more reliant on Germany

The European Commission released its latest GDP figures on May 15th. In a rare bit of good news, the data are better than expected for some countries, most notably Germany. That country’s economy surpassed expectations by managing to grow by 0.5% during the first three months of the year. As a whole, the euro area registered stagnant growth, and without Germany its economy would have declined by 0.2%. Germany accounts for about 28% of euro-area output, yet its contribution to euro-area growth has increased markedly since 2004. It was responsible for 65% of the region’s growth in output on average since 2007. Meanwhile the euro zone’s peripheral countries—Portugal, Ireland, Italy, Greece and Spain—have seen their contribution decline from a pre-crisis average of 45% to a drag of 10% since 2007.

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