After a disappointing end of 2010, the euro zone economy gained momentum at the start of 2011. In the first three months of the year, the euro zone economy grew by 0.8% Q/Q, significantly above the consensus estimate of 0.6% Q/Q. A breakdown is not yet available but national data show that strength was based, of course, in Europe’s growth engine Germany (1.5% Q/Q), but also in France (1.0% Q/Q), Belgium (1.0% Q/Q) and the Netherlands (0.9% Q/Q). Nevertheless, growth remains two-fold with Spanish GDP only slightly better than expected (0.3% Q/Q) but still soft, while the Italian economy barely grew (0.1% Q/Q) for a second straight quarter! Greek GDP surprised on the upside in Q1 (0.8% Q/Q), but this was mainly due to a downward revision of the previous quarter (from -1.4% Q/Q to -2.8% Q/Q) and Portugal officially slid back into recession, contracting for the second straight quarter. Concluding, the headline figure is certainly encouraging, with strong growth in core countries, probably partly due to a weather-related rebound, while peripheral EMU countries are still struggling to stay out of recession.