While the German economy expanded by an impressive 0.8% in Q1, this failed to spur growth elsewhere in the euro-zone and the region's GDP rose by just 0.2%. Possible explanations for this are the fact that Germany's expansion was partly down to temporary effects, Germany imports relatively little from other euro-zone countries and their domestic demand remains very weak.
This implies that the German recovery cannot be relied upon to keep gaining pace and, even if it does, this will not guarantee strong growth elsewhere. There is every reason for the ECB to provide more policy support, ideally targeted at the economies and sectors that are struggling the most.
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