German economy stagnates
The Germany economy stagnated during the final three months of 2005, official statistics have revealed, in news that is unlikely to shift the euro's downward trajectory seen in the last week.
This afternoon the euro was at 1.4578 against the pound, while the dollar stood at 1.1870 to the single currency.
Germany's GDP had expanded by 0.6 per cent in the July-September period, but stayed the same during the fourth quarter - the weakest quarterly performance since it contracted by 0.1 per cent in the last three months of 2004.
Experts have attributed the hiatus to a fall in consumer demand, with stronger investment on the back of Germany's soaring business confidence failing to offset poor retail performance and high unemployment.
"The interpretation will be that the economy has taken a breather," Rainer Guntermann of Dresdner Kleinwort Wasserstein told the BBC.
"It would be wrong to talk about an end to the recovery. The second half of 2005 was better than the first."
Germany's struggling performance in 2005 reflected a slip in growth from 2.1 per cent in 2004 to only 1.3 per cent in 2006.
European finance ministers are confident that the eurozone conditions are ripe for a recovery throughout the forthcoming year, with the European Commission predicting growth of between 1.9 and 2.2 per cent in 2006.