The French economy rebounded less strongly than expected in the third quarter making the government's annual growth target all but impossible to reach. As Laura Frykberg reports, Spain expanded at a slightly slower pace but seems to have weathered a political deadlock which is expected to be resolved over the weekend.
It's the world's most visited country. Tens of millions of tourists trek to France each year. Their shopping sprees - a key driver of the economy. But new figures show that trend has changed. Third-quarter GDP grew just 0.2 percent - slowed by stalled consumer spending. The government, now unlikely to make its 1.5 percent target by the end of the year. A problem some warn is far from surface deep. SOUNDBITE (English) CITY INDEX MARKET ANALYST, KEN ODELUGA, SAYING: "It looks like a persisting structural problem which is bound up with the economic situation, political and of course - it has to be mentioned - employment regulations and laws." It's neighbour's economy did a little better. Spain posted 0.7 percent growth in the last quarter. Spurred by low inflation, falling unemployment and a good tourist season. All despite a political deadlock - expected to be resolved this weekend. SOUNDBITE (English) CITY INDEX MARKET ANALYST, KEN ODELUGA, SAYING: "What looks like to be the confirmation of the administration of Rajoy is a boom - for the investment community we have seen the reaction by the equity markets." Sentiment across the euro zone as a whole - was better than expected this month. Fueled by higher optimism in industry and services. The business climate was also up - its highest reading in five years.