Breaking: Germanys GDP Growth Slows More Than Expected

The German economy, Europe’s largest, almost stalled in the second quarter as the region’s sovereign debt crisis weighed on confidence.

The worse-than-expected GDP data add to signs Europe is flirting with a renewed economic slump. France’s recovery unexpectedly ground to a halt in the second quarter, Italian and Spanish expansion remained sluggish and Greece’s economy contracted.

“The German data are certainly disappointing,” said Juergen Michels, chief euro-area economist at Citigroup in London. “Everything is pointing toward stagnation in the euro area in the second quarter.”

French president Nicholas Sarkozy and German chancellor Angela Merkel, are due to meet Tuesday after the European Central Bank was forced to intervene again in the crisis.

However, French and German officials have been playing down the notion of a eurobond solution to the problem in recent days, despite several days of speculation, as the ever-increasing financial burden of keeping the crisis at bay seems to be pointing to a drastic, catch-all approach to solving the problem.

Billionaire investment guru George Soros has launched a media campaign advocating the move, writing in several major European publications. "Only Germany can reverse the dynamic of a European decay. Germany and other countries with a AAA rating have to approve some sort of euro-bond regime. Otherwise, the euro will implode," he wrote in a German newspaper last week. A similar opinion piece appears in today's FT.