The above Table confirmed that the growth rate of Euro area is far behind the China.The growth rate of Greece is negative although Italy achieved a marginal positive growth rate.Industrial output is falling in Greece and increasing in Italy less than 2%.Both the countries faced high unemployment rate with inflation rates higher than Euro area. According to the latest data, construction in the euro-zone is falling, manufacturing output growth is slowing (and declining outright in parts of the periphery), and the contribution to growth from government is falling around the continent. The ECB's decision to boost interest rates has prevented the decline in the euro that might be expected to accompany an intensification of the debt crisis.In other words, every potential driver of euro-zone growth is contracting or weakening. And the governmental response is more fiscal austerity and an increase in interest rates. A return to recession seems unavoidable. I don't think that's likely to make the debt crisis any easier to manage.A dearer euro will hurt euro-zone exports at just the moment export growth is most needed. But there will be more trouble ahead. All these debates—around the new Greek program, private sector involvement, the amount of funding necessary, the talk of 'selective default' may be too expensive for Greece and too little or inadequate to effectively deal with the management of Greek debt. Europe, is needed for a new "stress test" results which will be announced in a few days.It is hopeful that Britain has reversed its previous position on the development of a two-speed Europe choosing much deeper fiscal integration. Britain believes the following: (a) a big leap towards fiscal union is the only way of saving the single currency, (b) Britain has a strong interest in the survival of the single currency, (c) Britain must play no part in bailing out the single currency and will stand aloof from fiscal integration, thus (d) our national interest now lies in allowing Europe to divide into markedly different zones of integration, with us on the outside.
Thus the EU finance minister usually reported that ,“I think we have to accept that greater euro zone integration is necessary to make the single currency work and that is very much in our national interest,” he says. “We should be prepared to let that happen.”
The chancellor is hopeful but key decision is left for Euro-27.