Valls’s difficult climb

IT MAY be fragile, but recovery seems at last to be under way in Europe, five years after the onset of its worst-ever post-war recession. In the first quarter of 2014, GDP in the euro zone expanded by 0.9% over a year earlier, and by 2.3% in Germany; it grew by 3.1% in Britain, which is outside the single-currency area. In the second quarter, the Markit purchasing-managers’ index for the euro zone reached its highest level for three years. Output has now risen for 12 months in a row. Yet amid all these signs of a belated upturn, as the Markit index cruelly revealed, there was one obvious and awkward weak link: France, the euro zone’s second-biggest economy.

After two flat years, French growth came to a new standstill in the first quarter. The business-confidence index is down on nine months ago, according to Insee, France’s statistics body, whose “turning-point” indicator went negative in June for the first time in a year. Output in manufacturing and services also fell in June, for the second month running, according to Markit, and firms cut jobs for an eighth consecutive month. The French public-finances watchdog has warned President François Hollande’s Socialist government that its forecast of 1% growth for 2014 looks “high”. The European Commission adds that its expectation of 1.7% growth in 2015 is also optimistic.