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Business morale highs for some at least

Wednesday, March 25, 2015 - 02:03

German and French business morale are back on the rise. It's the latest in a string of positive data from the euro zone. But as Hayley Platt reports there are still problems ahead for some.

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Powering ahead - Germany's economy is on a roll. Business morale rose for a fifth month in a row in March - beating expectations and hitting its highest level in almost a year. IFO's index is based on surveys of 7,000 firms. Klaus Wohlrab is one of the organisation's economists. SOUNDBITE: Klaus Wohlrab, Economist, Info Institute, saying (German): "The numbers are very strong. Hence we are expecting that the German economy will continue to expand. The current situation is simply good. Positive factors like the oil price, the good business climate and the rising incomes are here to stay." France is on the up too. The milder weather warming up industry as well as tourists. French firms were their most upbeat for three years with INSEE indicators in March up two points at 96. Cheap energy is partly the reason but France is still seen as the biggest risk to the euro zone. SOUNDBITE: Joe Rundle, ETX Capital, saying (English): "The French economy is certainly not dynamic. It is benefitting from a weak euro but there's a huge social welfare problem and I think there could be a real risk that France falls into recession and if that happens Germany is going to have to address the issue because France is a serious problem, unlike Greece which is managable should they need to pull the trigger on the bailout." That's still a real possibility and the engines aren't turning everywhere, says ETX Capital's Joe Rundle. SOUNDBITE: Joe Rundle, ETX Capital, saying (English): "I think we're not going to get a recovery in the euro zone as a whole anytime soon. We're going to keep seeing these big issues where countries run out of money or where you get political change carrying on. That suits Germany because you get a slow recovery and this maintenance of a weak currency for them." It's also too early to predict the full impact of the ECB's new bond-buying programme. Spring has clearly arrived for some in the euro zone - but few are willing to forecast a summer heatwave quite yet.

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Business morale highs for some at least

Wednesday, March 25, 2015 - 02:03