14 August 2012 Last updated at 12:34 ET

Article written by Stephanie Flanders Economics editor

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Eurozone: What goes around comes around

 

Five of the 17 members of the eurozone are now formally in recession.

Analysts think it's only a matter of time before many other major European economies join the list.

Together, European nations plunged into their first dip of recession back in 2008.

But since then, the real economy has been pushing the eurozone apart, even as politicians battle to pull it together.

Italy is producing about 7% less than it was before the crisis. Italy's national output shrank by nearly 0.75 percentage points in the second quarter alone.

Goldman Sachs produced this graph using Eurostat data

But Germany's national output is now significantly larger than it was four years ago. It even grew in the three months to June - by 0.3%.

France has not grown at all since the start of the year.

German voters think they have paid a high price for the troubles of Greece and others. But German exporters have also been helped by the weakness of the euro.

If it were not for the single currency, the deutschmark would have been soaring over the past two years, and German exporters would have struggled to compete, like their Swiss neighbours today.

In the past few months, German exporters have still managed to sell their goods in Asia and the US, but they are being hit by falling demand in countries like Spain.

These latest figures from Eurostat show that other previously strong economies like Belgium and Finland have also been pulled down by the troubles of the periphery, and the shadow that the crisis has cast over nearly all of Europe's banks. (Incidentally, Chinese exporters to Europe are suffering as well.)

So, you might say, Germany is finally getting a taste of what the periphery has been going through for the past year or so.

But of course, many Germans would say they had already done so. They just "got their pain in early", in the years after the euro was created.

The most interesting feature of today's numbers - highlighted by economists at Jefferies - is that, for the first time, they put Germany's cumulative GDP growth since the start of the single currency ahead of the rest of the eurozone.

We can now say it has grown a whole 0.1% more than the other members of the single currency since 1999. Wow.

So, it's finally official. After 13 years with the single currency, Germany has been one of the winners.

"Tell us something we don't know," many on the periphery would respond.

But they, and we, will all lose if the uncertainty hanging over the euro's future continues to pull down the European economy.