The US had a surprise GDP boost just before the SHTF.
Germany's surprise GDP boost is very much the same, a big increase in inventory across the board.
As always, the US is just 18 months ahead of the world.
The Euro zone is about to suffer the blow that broke the ERM and the other currency unions

Dominic, Manchester, UK

On Spain.
30% of Spanish GDP is residential construction. That will dry up, and thats depression territory.
For comparison,. 10% of US GDP was residential construction, look at how hard the US has been hit now thats dried up

Dominic, Manchester, UK

Economists try to rationalise ,but many people in Europe make the euro attractive because it represents stability compared to the situation before.Look at the former Yugoslav Republics the Euro is the defacto currency. Economists have great difficulty in dealing with psychological factors.

Nigel Brazier, Cambridge,

When will people realise that the Euro was introduced for other countries to conform to the German economic cycle? The Spanish and Irish experiences are that it hasn't worked as both countries were unable to combat inflation when they most needed to and now have huge property bubbles as a result.

Paul, Coventry.,

Britain will soon adopt the euro currency as its value reaches par with the euro. The british pound is being manipulated down to achieve this. Once the pound and the euro reach par the public will accept the euro.

Jim Wills, Brisbane, Australia

And how about the pound - it has been loosing so many tests since the 1970s yet nobody takes note.

Fred Caprivi, Manchester,

Andrew

Of course you are missing something. If your economy is weak you need low interest rates and a currency that is not surging. The UK has outperformed every other major EU country in GDP per capita growth over the last five years partly because it is not in the Eurozone.

Nick, London,

The Euro has been fortunate in that no recessions have struck for its first ten years. Its first real test is only just beginning.

Tapestry, Manila, Philippines

The Times forecasted in the 90s' that the euro would never exist. Since 1999, it has repeated that its days were numbered. The same people, who have showed so much prescience in the past, are now forseeing its imminent demise. Are they not tired of being always right?

Frederic Dodin, Cambridge, UK

michael , cahersiveen-adams town, madness

No; he is saying that some economies have been more prudent than others.

Morvan, Saulieu, France

There are two questions here. Everyone is going have a tough time in the next decade, so does a currency union help or hurt? If you look at past currency unions, they were usually founded in good times, and came apart in harsher times. That suggests economies need flexibility in currencies.

jon livesey, Sunnyvale, CA/USA

The Republic of Ireland is a great example of how successful the Euro has been - NOT! ECB rates were held too low for too long, with the consequence of a huge property bubble fueled by easy credit resulting in a national debt which, per head of population, is even greater than that of the UK.

Paul, Coventry,

"Ten years on, and the critics have been vindicated, in spades."

In those ten years the euro has risen by a third against the dollar and by 12% against sterling.

Am I missing something?

Andrew, London (but temporarily away),

Although being firmly against the EU and the euro, as an economist I say the euro has been better managed than e g the dollar. Every German chancellor knows she/he wouldn't survive a deliberately weakened euro a la dollar, therefore the EU Latin bloc incl. France may soon create its own currency.

Joerg, Berlin,

Has anyone noted that firstly Spain has a huge budget surplus, which the UK has not. Whereas the UK has borrowed 2.7 million pounds to get out a tax mess. Spain actually has a E20 million surplus. Look at our own economy before we actually criticise others! Spain just announced growth of .7% Q1!!

Robert, Henley, UK

David Hammory only sees the mediterranean countries as 'touristic destinations'. Pity that Spain has many other important industries (agriculture is just one), Italy has food, fashion, etc.

Paolo, london, uk

Dave in Liverpool, Spain is not the only country on the Med.
Whislt Spain is favourite for Brits, the rest of Europe also goes to the Med, so they don't really need you folks that bad.

So when the Pound is worth less than a Euro and starts hitting the pocket, will you still cling to it?

Brian, London, UK

I quite agree that Spain did overheat as a consequence of the ECB trying to prod the German's out of the doldrums. They were too slow to act. Managing the needs of everybody is a difficult task. The UK has proved expertly that dousing the fire of one economy and one currency is too much for them.

Kevin Ripton, Frankfurt, Germany

The UK hasn't done too well with over lax monetary policy, fueling an unsustainable consumer boom. We are largely to blame for exporting property speculation to Spain and similar areas. At least the Euro has removed the money changers who inflict added cost on trade and tourism.

Stephen Marchant, Broadhempston, UK

.... Europe needs a strong euro and the UK needs to be a part of that. In a global world smaller currencies, like sterling, will be hammered by speculators and feasted upon by the global rich.

Stephen Marchant, Broadhempston, UK

The 'mediteranean' economies are poised to fall off a cliff, with tourism declining with the rising flight costs and the squeeze on potential holidaymakers. There is very little to replace tourism here. There will be some mind blowing bargains in Spanish villas on offer next year.

David Nammory, Liverpool,

Well written analytical piece.

The economical differences between Germanic and Latin Europe are not new. The Euro has, however, made those differences smaller. It's a long process with some growing pains, but there is no need to panic yet at all.

Erik, the Hague, Netherlands

in simple terms are you saying one economy is based on cheap labour ans another is based on the rampid housing maketand personnel debt.

michael , cahersiveen-adams town, madness