The European Commission said on Monday the two economies were on diverging paths this year with Germany forecast to be in a recession with a 0.4% contraction and France expected to grow 1.0%. With weak construction and declining construction investment weighing on Europe's biggest economy, Germany's outlook was slashed from a previous forecast for 0.2% growth while France was upgraded from 0.7%. The contrasting fortunes of the euro zone's two biggest economies can also be explained by tailwinds working against Germany and headwinds helping France. Germany's gas-hungry chemical industry has seen production fall 18% from 2019 levels while in France it is only 8%, Colombier said. That leaves few props to lend support to French growth going forward other than household savings.

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Persons: Jean, Paul Pelissier, Germany's, Mathieu, tailwinds, headwinds, Charles, Henri Colombier, Colombier, Plane, Leigh Thomas, William Maclean Organizations: REUTERS, European, Germany, France's Finance, Thomson Locations: Marseille, Fos, Fos sur Mer, France, Germany, PARIS, Paris