Growth in the euro area has slowed sharply following a very strong start to 2008, and available indicators suggest no improvement for now. Export diversification, not only to Asia but also to Russia and Eastern Europe (see Figure 1), has helped to reduce Europe’s dependence on the US. As a result, export growth remained strong despite the slowdown of the US economy last year. But foreign order intake, especially in Germany, has been declining sharply of late. This suggests an export growth slowdown.
