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Conflicting fortunes for the euro zone

Thursday, January 24, 2013 - 01:52

Jan.24 - New data shows mixed fortunes for the euro zone - Spain's youth unemployment hits record highs and France appears to be heading for recession but there are signs the euro zone economy elsewhere has taken a step closer to recovery. Sonia Legg reports.

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Almost six million people out of work - and 60% of (6 in every 10) under 25's unemployed. The latest job numbers from Spain are the worst since records began in the 1970's. For many, emigration is the only option. (SOUNDBITE) (Spanish) RAUL SANCHEZ, UNEMPLOYED, SAYING: "You can imagine the prospects that Spaniards have, nothing. In the end we may all have to leave just like many of our parents did." But where should they go? The fortunes of other major euro zone economies are certainly mixed. Latest business surveys suggest France is heading for recession and says, Coutts CIO Alan Higgins, it may struggle for some time (SOUNDBITE) (English) ALAN HIGGINS, CIO, COUTTS, SAYING: "Germany is clearly the leading export machine and France suffers by comparison. France needs a much weaker euro so it is a little bit troublesome this rally in the euro for France and it's going to be a long hard road for France to get back to competitiveness." In contrast Germany is buoyant - taking the whole euro zone a step closer to recovery. Surveys of the growth prospects of 5,000 euro zone firms were better than expected. Markit's PMI for Germany was almost 54 - a 12 month high - compared to less than 43 for France - a four year low As usual it was largely thanks to China where manufacturing this month hit a two year high. ING's Carsten Brzeski. SOUNDBITE: Carsten Brzeski, ING senior consultant, saying (English): "As long as the Chinese economy continues the current pick up, as long as the U.S. economy does not fall off the fiscal cliff with a delay then I think Germany could be the stronghold of the euro zone throughout 2013, being one of the few countries actually recording positive growth numbers." Latest polls predict a flat outlook for the first quarter of this year after a 0.4 percent contraction at the end of last year. But those in Spain seeking relief from their problems may do well to stay away from France.

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Conflicting fortunes for the euro zone

Thursday, January 24, 2013 - 01:52

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