Wall Street Journal
February 14, 2011
In Europe, GDP might as well stand for "Grossly Divided Progress."
The region's fourth-quarter growth figures, due out this week, are expected to be a Neapolitan treat, divided, that is, into three distinct flavors. First is Germany, whose strong rebound out of recession is almost single-handedly powering euro-zone growth. Next are the more middling economies like France, Italy and Sweden. And finally, there are the lagging peripheral nations of Portugal, Ireland, Greece and Spain (the infamous "PIGS").
A large disparity in growth among the three groups already exists. For example, in the first three quarters of 2010, Germany's average annualized gross domestic product expanded 4.9% after adjusting for inflation. The middle pack managed only a 1.6% growth rate, according to J.P. Morgan, and the PIGS barely squealed in above zero, with annualized growth of 0.1%.
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