Preliminary estimates of the growth of Gross Domestic Product in the Euro-Zone reveal a disappointing rise of 0.2% in the fourth quarter of 2004, about one-half of what the consensus was looking for. Not all of the twelve countries comprising the Euro Zone have reported. Among those that have, Germany, Italy and the Netherlands showed unexpected declines from the third to the fourth quarter of 0.23%, 0.31% and. 0.08%, respectively. Spain and France, on the contrary, reported increases of 0.8% and 0.7%, respectively.

For the year as a whole, growth in the Euro-Zone is estimated at about 1.6% compared with a growth of 4.4% for the U.S. Among the individual countries that have reported, Spain and France are estimated to have led the group with growth rates of 2.65% and 2.40%.The Netherlands, Italy and Germany are estimated to have risen 1.35%, 1.14% and 1.03%. The better performance of France over Germany over the past few years is shown in the first chart showing the quarterly changes in GDP in Germany and France.

Part of the cause of the relatively slow growth of the Euro-Zone over the last few years can be attributed to the rise in the euro and the high price of oil.These trends are shown in the second chart.