Tag: divergence

As the news item, A Greek tragedy reported, the level of debt in Greece and also in Portugal, Spain, Ireland and Italy, has caused worries, not just for their creditors, but also for the whole eurozone. Here we give you the opportunity to listen to a podcast from the Guardian in which some of the paper’s main economic columnists, along with Observer commentator, William Keegan, discuss the effects of this debt on the euro. To quote the introduction to the podcast:

“In Brussels, European leaders have pledged ‘determined and co-ordinated’ action to help Greece – they won’t let it fail. Our Europe editor Ian Traynor says the announcement of a deal was designed to keep the markets happy.

But leaders of wealthier euro nations like Germany are hoping they won’t have to ask their voters to bail Greece out. Kate Connolly, our Berlin correspondent, explains why Germans are so reluctant to provide financial assistance.

It’s being seen as a defining moment for the euro. Economics editor Larry Elliott says not signing Britain up to the single currency was the best decision Gordon Brown ever made.”

The debt crisis facing the Euro Guardian daily podcast (12/2/10)


  1. To what extent is Greece’s debt a problem for the whole eurozone?
  2. Consider the arguments for and against bailing Greece out (a) by stronger eurozone countries, such as Germany and France; (b) by the IMF.
  3. What support for Greece would minimise the problem of moral hazard?
  4. How would you set about establishing whether the current eurozone is an optimal currency area?
  5. How do the current problems of debt affect the arguments about whether Britain should adopt the euro?

The 2009 quarter 2 statistics on the French, German and Japanese economies show that economic growth has returned. Other countries, meanwhile, such as the UK, USA, Italy and Spain, are still in recession (see the Guardian’s Recession watch: which nations’ GDP is still going down?). Their rate of decline, however, is slowing.

Does this mean that the global economy is now recovering? And why do countries, such as France and Germany, seem to be more successful in pulling out of recession? Is it to do with the structure of their economies, or the macroeconomic policies theory have pursued, or merely that the time path of countries’ move into and out of recession is not totally synchronised? The following articles look at the evidence and the explanations.

France and Germany exit recession BBC News (13/8/09)
France and Germany exit recession (video), (video 2) BBC News (13/8/09)
Why are France and Germany out of recession? BBC News (13/8/09)
Hong Kong emerges from recession BBC News (14/8/09)
China economy shows improvement BBC News (11/8/09)
Japan’s economy leaves recession BBC News (17/8/09)
Japan returns to growth (video) Reuters (17/8/09)
Does Japan offer hope around the world? BBC News (17/8/09)
France and Germany pull out of recession (video) France 24 (13/8/09)
Europe buoyed by returning growth (video) Channel 4 News (10/8/09)
France and Germany beat Britain out of recession The Herald (14/8/09)
Will Germany Beat the U.S. to Recovery? BusinessWeek (14/8/09)
France and Germany Climb Out of Recession Time (13/8/09)
France and Germany lead the West out of recession Telegraph (13/8/09)
Recession over for France and Germany Independent (13/8/09)
Sean O’Grady: Brown must resent France and Germany’s growth Independent (14/8/09)
Hamish McRae: Recession talk is over, now the recovery speculation begins… Independent (14/8/09)
Europe’s economies: Sailing away The Economist (13/8/09)

Listen to the second part (from 11 min 40 sec) of the following podcast , which dicusses whether the recovery in France and Japan is likely to be sustained:
The Business Guardian podcast> (19/8/09)

Data for the OECD countries can be found in GDP in the OECD area stabilised in the second quarter of 2009 OECD Press Release (19/8/09)


  1. Why was the German economy the hardest hit of the major economies of the developed world?
  2. Why are the French and German economies recovering while the UK and US economies are still in recession?
  3. What will determine whether the recovery in France and Germany will be sustained?
  4. What will be the economic implications of a divergence of the growth rates of the economies of the eurozone?