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The 20 nations sharing the euro currency saw their economy expand by 0.4% in the first quarter, beating expectations for 0.2%, Eurostat data shows. However, it is believed that data was distorted by a 3.2% expansion in Ireland, fuelled largely by activity among big foreign companies based there for tax reasons.
Germany, Europe’s largest economy, grew by just 0.2% while France expanded by 0.1% and Italy by 0.3%, suggesting that excluding Ireland, the headline figure would be more modest.
A key sentiment indicator showed a major dip. The ECB has already said that the financial market turbulence set off by U.S. policies and the general deterioration in sentiment will dampen growth. The bloc was seen expanding by less than 1% even before Trump’s tariff bombshell, suggesting that any other major damage would put the euro zone close to a recession.
Source: reuters.com