Official data reveals that the economy in France grew by 0.6 percent — but Germany, Europe's so-called economic powerhouse revealed a disappointing growth of 0.3 percent — compared to the 0.7 percent rate at the end of 2014.
"The downward trend in the French economy has been much more extreme — so you'd expect it to bounce back faster," Harry Colvin, Director and Senior Economist at Longview Economics told Sputnik News.
"Germany had a much softer downward trend so you wouldn't expect punchy numbers out of Germany. France had a bigger drop in their economy during 2013/14 with much poorer growth, so technically it was in recession over the course of 2013. The reason why the French numbers are strong is because it's bouncing back from a low level — this is normal. If you bounce a ball from a high level — it bounces back higher."
It had been predicted that the French economy would grow — and after the figures were revealed, French Finance Minister Michel Sapin told BFM television: "We will be at more than one percent at year-end."
Meanwhile, the UK's economy grew by just 0.3 percent in the first three months of this year — half the rate that was predicted by the Bank of England.
But Harry Colvin is optimistic for the general economic growth in the Eurozone which has accelerated by 0.4 percent.
"Our view is that lots of good things are happening in Europe. We've had a deleveraging cycle that's coming to an end — you've had a load of stimulus in the oil price in European terms and considerable euro weakness, good for trade. Add to this a loose monetary policy, stabilizing house prices in Eurozone economies — bank balance sheets are beginning to grow. And the credit growth in the private sector is turning positive. Generally, we're emerging from a soft patch in Europe and entering into — or already in a period of — growth trend. This however, is not the case for every Eurozone country."
"I would say this excludes Greece — it's a basket case," Colvin told Sputnik News.
"In the past five years we've had multiple, what seem like, 'make or break' type moments. There's loads more mileage in this Greek story. If they miss a payment, they won't be considered technically in default, according to the ratings agency — even if they miss a payment the European Central Bank won't cut its emergency liquidity assistance.
"Even if they miss a payment to the International Monetary Fund, it won't be until after a month following the missed payment that the managing director of the IMF formally reports it to the board. So, despite missing a payment — it won't be for a month later that we see any serious ramifications on Greece's position in the Eurozone," said Colvin.
With most national #GDP results in, #eurozone economy to have expanded 0.4% — 0.5% in Q1 (currently approx. +0.43%) http://t.co/ubDO0eEMoD
— Markit Economics (@MarkitEconomics) May 13, 2015
According to Harry Colvin, "a missed payment situation might help Greece and other finance ministers focus their minds and a number of things might happen." Colvin believes this could lead to an orderly exit from the Eurozone or indeed a referendum in Greece as to whether they want to stay in or opt out.
"The stories about Greece have been going on for five years, so the markets are familiar with them, and half [are] anticipating an exit. Lots of banks in Europe have been unwinding their exposure to Greece.
"If there was some sort of disorderly and dramatic fallout and Greece left the Eurozone and defaulted — I don't think this would be a big deal for the stock market or the bond market. It's nothing to worry about."
