German GDP less than Spain GDP Q2 2011

German GDP for Q2 2011 came in at one tenth of a percent growth; five tenths was expected.   Spain had a growth of two tenths of a percent.

Eurozone GDP Q2 grew two tenths of a percent; three tenths was expected.  The eurozone and German economy are slowing.  The French Q2 GDP was unchanged (zero growth).  Manufacturing and exports declined and the eurozone trade deficit widen even though imports declined 4.1%.

Yesterday (Monday), a VOXEU paper asked if Germany can be Europe's engine of economic growth and concluded that Germany needs, as many economists have been urging for some time in discussing the current account imbalances within the eurozone, to rebalance sustained growth toward domestic demand with increased domestic investment and higher incomes which implies less unemployment if done right.

Meanwhile the credit crunch in the eurozone periphery continues as European banks struggle to obtain short term funding at a time when lower stock equity from the recent market downturn will require many banks to raise capital.

The European markets are down and you can expect the U.S. markets to open lower.

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