In the category “some saw it coming, some didn’t” the news that both the Finnish and Dutch economies shrunk more than expected recently.
The Dutch economy shrunk by 1,4% in the first quarter of 2014 (compared to the previous quarter in 2013, 0,5% compared to the same quarter in 2013) and the Finnish economy 0,8% (compared to the same quarter in 2013, 0,4% compared to previous quarter).
In the Dutch case, the explanation is that due to the mild winter, less natural gas was used and exported (as one fairly large element in the developments). The Dutch Statistics Office states that loss of jobs is still growing, especially in health care. But on the other hand, rising investment and industrial production is noted, which seems to show that the underlying trend would be upwards.
In the Finnish case, both primary and secondary production decreased, by a large 3%. Services production decreased by 1%. Also the number of employed decreased, as did the number of hours worked relative to the first quarter of 2013.
What does this data tell us? First of all, even in the so-called core countries the crisis is far from over. Second, I do think the Netherlands may experience more positive developments because of the news regarding investments. Without investments there can be no growth. For Finland it is more difficult to find recent data on investments, but this source states that in 2013 investment declined (in value) by about 5% and in the current year they are expected to fall by more than 4%. In combination with the ongoing attempts of the Finnish government to shrink its budget (to aim for the Maastricht-criteria) this does not bode well for the Finnish economy. Although this is not based on a calculation, I think even the official estimate of GDP growth for 2014 of 0,5% must be very optimistic.