German retail sales have jumped by the largest amount in seven years and unemployment has fallen in Spain. As Amy Pollock reports both have added to the optimism over the region's economy.
TV AND WEB RESTRICTIONS~** **~ German shoppers have a spring in their step. Their new found spending habits pushed up retail sales nearly three percent in January - the biggest jump in seven years. And sales grew 5.3 percent on the year, driven by online shopping and spending on food, books, jewellery and cosmetics. It's something that will be welcomed by Germany's euro zone partners. FXPro's Simon Smith says they'll be looking for the trend to continue in traditionally thrifty Germany. (SOUNDBITE) (English) CHIEF ECONOMIST AT FXPRO, SIMON SMITH, SAYING: "If Germany does spend more, it's a positive within the euro zone, it allows other countries to benefit from that and the German economy does well. It is still a good 30 percent--plus of the euro zone economy so generally when Germany does well, the euro zone does well." The German government is getting in on the act - it's pledged to boost investment spending by some 5 billion euros in the next three years. That's on top of 10 billion previously announced. With Spain posting positive unemployment numbers too, things are looking up for the euro zone economy, although not enough, says Smith, for strugglers like Spain to ditch the reform programme. (SOUNDBITE) (English) CHIEF ECONOMIST AT FXPRO, SIMON SMITH, SAYING: "Cyclically it's turned a corner, structurally it's still struggling...you have to remember we're still, especially in Spain, coming from a very high level of unemployment and the gap between the unemployment we're seeing in Spain and Germany in terms of unemployment rates is still far too large." All this is despite the ongoing crisis in Greece. And a new survey of investors does suggest caution. Despite an extension to Greece's bailout being agreed last month, 37 percent expect Athens to leave the euro within the next year, up from 22 percent last month.