The European zone's economy grew slightly more than expected in the three months to June, data showed on Tuesday, but a mixed fundamental picture and some pessimistic outlooks clouded the outlook for the rest of the year.
The figures suggest the European bloc is struggling to regain its footing in global trade despite still enjoying a domestic recovery driven by higher real incomes and public spending.
Output in the 20 countries that use the euro currency rose by 0.3% in the second quarter of this year, according to Eurostat data, maintaining the pace from the previous quarter and slightly exceeding economists' expectations.
Among major economies, France and Spain performed better than expected, Italy maintained its position while German output shrank unexpectedly, reinforcing fears of a lingering crisis in the country that for a decade has been a European powerhouse.
Consumer confidence also remained negative in July, adding to several weak outlooks in recent days.
"The economy of the European zone is seen as mixed, there was a time when it developed well. Waima as a whole is quite bad and could lead to a worrying situation," said ING economist Bert Colijn.
The 0.3% increase in France's quarterly GDP is an example.
Although growth was slightly better than expected, this was partly due to single cruise ship deliveries boosting exports and offsetting flat consumer spending.
Italy's economy on the other hand expanded by 0.2% as inventories recorded an increase and offset a decline in net exports, while Spain recorded a much stronger than expected growth of 0.8%, partly due to public investment.
Germany's economy lagged behind, with output falling by 0.1% due to lower investment in equipment and buildings in Europe's largest economy.
Economists worry that rather than a short-term decline, the data reflect Germany's fundamental lack of competitiveness, partly due to the disruption of its business model based on cheap energy from Russia and intensive trade with China.
Inflation rose in several German states in July, suggesting that the national reading due tomorrow is unlikely to be below last month's 2.5%.
European zone-wide figures due on Wednesday will shed light on the case for a rate cut by the European Central Bank in September, with markets expecting another cut by the end of the year.
