Europe’s troubles seem to grow by the week. On Tuesday, the economic powerhouse of the continent, Germany, reported a sclerotic growth of 0.1% from April to June this year.
The main economies—the 17-member euro zone— grew by just 0.2% in the same period, down from the 0.8% growth in the previous three months (see Page 1924).
This is bad news for all countries there. Germany and France, another poorly performing economy, are at the heart of efforts to rescue tottering countries that threaten to engulf the European economy. The two countries are also key to moving towards a fiscal union, the first step of which is an agreement over euro bonds, which will enable single window borrowing for all countries. Tuesday’s results will not help that process. The danger now is that political resistance may scuttle that process, fuelling a crisis down the road. However remote that outcome may seem, it can’t be discounted.