Inflation held close to even, at 0.6 percent in April, unchanged from a month earlier.
But Eurostat said Friday the gross domestic product for the Euro area and the 27 countries known as the EU27 had dropped by 2.5 percent in the first quarter, compared to the fourth quarter of 2008. Compared to a year ago, the GDP has dropped 4.6 percent in the Euro area and 4.4 percent in the EU27, which adds Sweden, Britain, Bulgaria, the Czech Republic, Denmark, Lithuania, Estonia, Latvia, Hungary, Poland, and Romania to the Euro area's 16 states.
The GDP in Germany, the largest economy in Europe, fell 3.8 percent. In Britain, total output dropped 1.9 percent. France, Italy and Spain had declines of 1.2 percent, 2.4 percent and 1.8 percent, respectively.
Unlike Asia and the United States, turnarounds in Europe, will not be leveraged by large stimulus spending programs. Headlines in Germany this week centered on budget gaps with subheads indicating a sigh of relief that the government did not take the bait and spend more. In Britain, talk of a turnaround comes none to soon, as its debt has soared. It is expected to reach $255 billion this year, the government said in April. In 2010, Britain's debt could reach 11.9 percent of the gross domestic product next year, The New York Times reported.
In Washington, the U.S. Treasury turned its attention to insurance companies this week, granting six firms that hustled to restructure themselves as banks the ability to tap into the Troubled Asset Relief Program.
TARP funds have been used to shore up American International Group Inc. and General Motors Corp's lending company GMAC. Last fall, several insurance companies took steps to buy savings and loans to qualify for funding.
The Treasury said Hartford Financial Services Group, Prudential Financial,
Lincoln National, Allstate, Ameriprise and Principal Financial group were eligible for $22 billion in TARP assistance, citing the importance of life insurance as a financial safety net.
Insurers applauded the approval they had been expecting since early April. At the Financial Services Roundtable, lobbyist Scott Talbott said, "You want the regulatory program to be as broad as possible. If all it took was regulatory gymnastics, that expands the program."
Asian markets turned higher Friday with the Nikkei index in Japan up 1.88 percent. The Hang Seng in Hong Kong turned up 1.51 percent. The S&P/ASX in Australia gained 1.34 percent.
In Europe, equities went the other way. In midday trading. The DJStoxx 600 gained 0.17 percent, but the DAX 30 in Germany fell 0.33 percent. The CAC 40 in France dropped 0.07 percent. In Britain, the FTSE was down 0.34 percent.
Copyright 2009 by United Press International.
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