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EU grows slowly,Italy runs and doubles France

Germany steady, Spain narrowly outpaces us. Stock markets down

18 August, 10:49
(ANSA) - BRUSSELS, 18 AGO - Eurozone and EU still growing in the second quarter, with a pace that appears decidedly brighter for Italy, while Germany, the 'locomotive of Europe,' remains stationary. That's the picture from the Union's statistics office, Eurostat, which estimates gross domestic product in both the eurozone countries and the EU grew by 0.6 percent in the second quarter of the year (in the first quarter, GDP grew by 0.5 percent in the eurozone and 0.6 percent in the Union).

For the eurozone, however, this is a downward revision from the first flash estimate made last July 29 by Eurostat, which had estimated growth of 0.7 percent for the euro countries alone. In contrast, employment rose by 0.3 percent (+0.6 percent in the first quarter in the eurozone and +0.5 percent in the EU). In comparison with other European countries, therefore, Italy's GDP appears decidedly above the European average, with growth of 1 percent in the second quarter compared to the 0.1 percent progress in the previous three months (+1 percent in the second quarter is the estimate of Italian GDP already given by Istat on July 29). Germany's gross domestic product posted a round zero, following +0.8% in January-March. In contrast, France's GDP did +0.5 percent, and among the larger member states, Spain's was up 1.1 percent.

Markets read the data carefully and not only because of the filings Eurozone growth made compared to the first GDP estimate.

Fears about growth and high prices dominated the stock markets and influenced government bond yields, especially after the release of the U.K. inflation figure, which jumped above estimates in July, to new 40-year highs and 10.1 percent (the figure was expected at 9.8 percent after the 9.4 percent jump marked back in June).

Also on the heels of a down start on Wall Street -- awaiting the Fed minutes -- European markets thus all lost ground. Milan closed down 1.04 percent, while the spread widened the gap between Btp and German Bund by nearly 7 points with the yield on Italian 10-year bonds rising 18 points to 3.304 percent. Far worse did the Frankfurt Stock Exchange, which finished down 2.05 percent. Paris closed down 0.97 percent, while London declined moderately to 0.27 percent. Eurostat's snapshot of EU countries shows large gaps, almost a leopard-skin pattern. The Netherlands' GDP growth appears to be in the lead (+2.6 percent, after +0.5 percent in the first quarter), followed by Romania (+2.1 percent after +5.1 percent in the first quarter) and Sweden (+1.4 percent after -0.7 percent in the first quarter).

On the other hand, Poland's GDP fell sharply (-2.3% after +2.5% in the first quarter), followed by declines in Latvia (-1.4%, from +3.4% in the first quarter) and Portugal (-0.2%, after +2.5%). Eurostat's second-quarter estimates confirm a picture then for the U.S. in technical recession, with GDP falling 0.2% (-0.4% in the first quarter), compared with the figure estimated at -0.9% for the second quarter by the U.S. Commerce Department in the last days of July. Eurostat also released data on new business registration earlier in the day, still down in the second quarter after already a negative start to the year, down 2 percent in the eurozone and 1.2 percent in the EU. In contrast, bankruptcy filings increased in the EU for the fourth consecutive quarter, rising 2.2 percent between April and June.

Italy saw a 5.2% drop in new business registration in the second quarter (-3.5% in the first quarter). Compared to the same quarter in 2021, bankruptcy filings in Italy in the second quarter of this year were down 14.7 percent (lacking comparison with Q1 '22; the figure rose 6.4 percent in the Eurozone, +6 percent in the EU). Year-on-year, then, new registrations fell 7 percent in Italy in the quarter (down 4.9 percent in the eurozone, down 3.1 percent in the EU). (ANSA).

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