Euro-area economic growth unexpectedly slowed last quarter the region’s three largest economies fell short of estimates, highlighting the fragility of the recovery amid uncertainty surrounding the global outlook.

Gross domestic product in the 19-nation region rose 0.3 percent, the European Union’s statistics office said on Friday. That fell short of the median prediction by economists that the 0.4 percent pace of the first quarter would be maintained. While German growth accelerated, the improvement was less than anticipated, and France’s economy stagnated.

With China jolting global markets by devaluing its currency and Greece on the verge of a new bailout program, the euro area’s nascent revival may yet struggle against the uncertain backdrop. European Central Bank policy makers meeting in July called the recovery “disappointing” and said they’re ready to adjust stimulus if needed, a summary of the discussions showed on Thursday.

David Fuller's view

Too much government and too many Socialistic policies are Europe’s perennial problems. 

Germany, with its work ethic and impressive industrial base usually muddles through in somewhat better shape than most other EU economies. 

France’s economy too often struggles despite its geographical advantages, the glories of Paris and the potential to be energy independent.  France’s leftwing government does little to restrain its militant unions.  Labour policies are counterproductive and taxes too high.  Consequently, the brain drain among France’s more entrepreneurial citizens is high, although we appreciate them here in London. 

The Grexit drama, while insignificant in terms of GDP, has further undermined confidence within the EU.  Mario Draghi’s QE programme of €60bn per month should lift EU stock markets by yearend and help corporate sentiment somewhat.  Will the EU become more growth oriented, enabling its economies to reduce unemployment in 2016?  Theoretically, yes, and I certainly hope so.  Meanwhile, if the UK’s ‘In-Out’ referendum was held today, I have little doubt that we would be leaving the EU.