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Retail sales in Germany fell back sharply in March, below even the most pessimistic forecasts. In real, or inflation-adjusted terms, sales dropped by 3% in March compared with February, and lost 4% on the year. Analysts had been forecasting a drop of around 2.7% on an annual basis. Increasing unemployment and anaemic economic growth conspired to keep Germans away from the shops. The sales data from the Federal Statistics Office will alarm policymakers as Europe's biggest economy struggles to shrug off the effects of the downturn. Gloomy outlook In a sign of the pain that retailers are feeling, the German...

THERE was widespread coverage in the French press of a leaked European Commission document which will initiate the excessive deficit procedure against France for its high budget deficit. France's deficit was 3.% in 2002 and is projected to reach 3.7% in 2003 - breaching the 3% limit two years in a row. This should lead to large fines. There was also a report in the German paper, Borsen Zeitung, which has seen a copy of another commission document saying the German deficit will be more than 3% in 2003, after surging over the limit in 2002. That will mean more...