European collective suffering over Greece was interrupted by some good news on Thursday. German unemployment fell more than expected, while earnings increased for several state companies are the largest.
No one will complain about the signs of strong growth in Europe's biggest economy, which has 10 times the economic output of Greece. But the recovery of the northern part of the euro zone as a sink deeper into crisis, a southern suburb set up a dilemma for monetary policy makers can increase the already serious tensions in Europe.
If growth continues to gain in Northern Europe during the rest of the year, the European Central Bank in Frankfurt would eventually face pressure to raise interest rates to restrain inflation.
But the rate increase could be dangerous for Greece and Spain, Portugal and other countries with debt problems, high raise borrowing costs for both government and business.
Recovery Could Create Headaches for Europe’s Central Bank
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