Economy, Germany | featured news

Even as the euro zone periphery starts to spy some glimmers of hope, concern is mounting that Germany is drifting apart from other countries at the core of the single currency bloc, notably France.

The euro-zone economy continued to shrink in October but at a slower pace than in recent months, an early gauge of activity showed, while a rise in consumer sentiment in Germany bolstered hopes that the slowdown there will be brief.

The euro zone's two largest economies avoided shrinking between April and June, but the resilience of Germany and France wasn't enough to prevent the currency bloc's economy as a whole from falling back into contraction.

Germany may be Europe’s most powerful economy. But its prosperity is so uneven that Poles just across the border see it differently: as a place where housing is a bargain... The uneasiness here helps to explain the unwillingness voiced by German Chancellor Angela Merkel about proposals that would require her country to dip further into its treasury to help address the rest of Europe’s economic problems.

Germany dismissed a French-led call for euro zone nations to issue common bonds, a day before a European Union leaders' summit which investors are looking to for new measures to counter the bloc's debt crisis.

The crushing defeat follows elections that rejected austerity policies in Greece, France and Italy, severely weakening Chancellor Merkel's hand at her first talks with FranCois Hollande, the new French President, in Berlin tomorrow (TUES).

Germany and the European Commission on Tuesday called on EU nations to stick to their promised budget cuts despite mounting voter discontent, but promised some new efforts to boost growth to alleviate economic hardship.

Investors nervous about the changing political winds in Europe initially drove down the euro and sent stock markets falling across the region Monday morning, though markets were bouncing back later in the day following renewed signs of strength in the German economy.

Germany and France clashed on Wednesday over whether the ECB should take bolder steps to stem the euro zone debt crisis, with Chancellor Angela Merkel issuing one of her starkest warnings yet against fiddling with the central bank's strict inflation-fighting mandate.

Stocks rose on Thursday after U.S. economic data came in stronger than forecast and Germany's lower house approved new powers for the euro zone's crisis fund.