Crack out a keg of beer and pop a magnum of champagne. Germany and France, the Eurzone’s biggest economies, are growing. Could it be that the Eurozone is (perish the cliché) turning a corner?
Germany retains its crown as the engine of the Euro Area – if the currency union was a clapped out old banger rather than a souped up sports car. German GDP growth edged up 0.1% to 0.4% in the fourth quarter of 2013, and was 1.4% higher than the previous year.
France, meanwhile, can take some joie de vivre from the fact that it’s not in recession any more. French GDP grew 0.3% in the last three months of the year and it stayed put at 0% in the third quarter, instead of the previous estimate of a 0.1% contraction. Finally some good news for the disaster-prone President François Hollande, after a few months of striking footballers, cauliflower-burning farmers and his alleged affair with an actress being splashed across the front pages.
Even southern European countries finally posted some anemic growth. Italy’s economy expanded for the first time since mid-2011, up a shaky 0.1%, while Spain’s GDP growth rose 0.2% to 0.3% in the quarter.
We in the UK can feel smug for a bit at the expense of our European cousins, with relatively booming fourth quarter GDP growth of 0.7% and full year expansion of 1.9%. However, the jibes can’t last for too long, as rubbish growth across the Channel won’t do much good for exports.
Italian politics, meanwhile, has come over all Julius Caeser – again. Prime Minister Enrico Letta is handing in his resignation to the Italian president today, after being ousted as leader of his own party in December.
The new kid on the block, Matteo Renzi, is the 39-year-old mayor of Florence, who is an admirer of Tony Blair and Barack Obama, fellow centre-lefties who were cool when they came to power. Renzi, who isn’t even an MP, has described himself as ‘hugely ambitious’ – at least he’s honest and not being accused of sex with underage prostitute a la Silvio ‘Bunga Bunga’ Berlusconi.
Renzi will also be the third unelected prime minister in a row and the head of a third government in 12 months (Letta lasted 10 months). Although Renzi has called for ‘profound change’ to drag Italy’s economy ‘out of the marshes’, Italians are used to the political musical chairs.
The markets have merely shrugged too. They tanked when Berlusconi resigned at the end of 2011, but have now figured out that when in Rome faces may change but it’ll still be business as usual.