France can barely muster a hop but Germany leapfrogs expectations as the euro zone releases its latest growth numbers, prompting hopes of a better start to 2015. David Pollard reports.
This is an image France would like to project. A defence industry on the attack with the sale of 24 Rafale warplanes and other equipment to Egypt, its first export customer, for a healthy five billion euro price tag. Thursday's reports of that are somewhat at odds with France's latest picture of growth. France managing only a feeble 0.1 per cent hop in the last quarter, according to the latest data. There's an even bigger contrast here in Germany. Planes grounded thanks to a pilot strike at Germanwings while the economy, seemingly, lifts off. Output in Europe's powerhouse economy was up 0.7 per cent in Q4 - far above forecasts. And pushed Frankfurt's DAX skyward too. It touched a new record high above 11,000 on a renewed sense of optimism. Robert Halver of Baader Bank. SOUNDBITE (German) CAPITAL MARKET ANALYST FROM BAADER BANK, ROBERT HALVER, SAYING (on GREECE): "Things will go even better because we have three factors working for us: a weak euro, favourable commodity prices and a world economy which is doing better than expected, all of which helps the German export industry tremendously." That's a welcome relief after two quarters of stagnation. Household spending picking up significantly in Germany. Domestic demand in Italy though kept growth pinned down - no change in the last quarter. Greece disappointed with a 0.2 per cent slip backwards. The wider euro zone picture isn't quite as bright, says Commerzbank strategist, Peter Dixon. Reform, in particular, still a problem. SOUNDBITE (English) PETER DIXON, GLOBAL STRATEGIST, COMMERZBANK, SAYING: ''This relates to things like the structure of the labour market, which badly needs reform, and until we see signs of that, we can't really talk about having turned a corner. And certainly the political message we are getting out of many euro zone countries suggest we're nowhere near tackling those kind of problems yet.'' For stellar growth in Europe, look east. Central European economies reported buoyant household spending. Hungary leading the pack with growth leaping 0.9 per cent on a quarterly basis, an annual rate of 3.4 per cent. A blue-sky performance many of its bigger neighbours might fantasise about.