The US economy has shrunken at its fastest rate since the depths of the recession five years ago as it emerged that the harsh winter took a far bigger toll on activity than previously estimated.

Official data released in Washington showed that output as measured by gross domestic product fell at an annual rate of 2.9% in the first three months of 2014. Originally, the Department of Commerce had said output rose by 0.1% at an annual rate in the quarter ending March before adjusting this to a 1% decline. The gap between the second and the third estimates was the largest on record. Wall Street was taken unawares by the size of the downward revision to growth in the world's biggest economy, with the consensus believing that growth would be down by 1.7% at an annual rate. But it expressed confidence that the US would quickly bounce back from a weather-affected start to 2014 by posting strong growth in the second quarter. Nancy Curtin, the chief investment officer of Close Brothers Asset Management said: "The US economy didn't just grind to a halt in the first quarter – it hit reverse as the polar vortex took its toll. But we can't judge current growth by looking in the rear-view mirror, and we are unlikely to see investors react strongly to what is now quite a long way behind us.

"More recent data have pointed to the economy picking up speed. Manufacturing is at a four year high, while the housing market is looking positive once more. It's clear that growth has gone up through the gears in Q2, and we'll see this reflected in the next GDP reading." Officials at the commerce department said the downward revision to growth had been the result of lower consumer spending on health care and a weaker than previously estimated contribution from exports.

Outstanding ! Art as sight and sound ...

In the battle over who should become the next president of the European Commission, David Cameron is depicted as the loser - "isolated", "incompetent", a serial mis-reader of Brussels politics.

Yet David Cameron is not alone in finding himself in a corner, defending a position he cannot retreat from.

Several leaders who doubted whether Jean-Claude Juncker was the best candidate for the job are now uncomfortably lining up behind him.

But Angela Merkel's position is almost as uncomfortable as that of David Cameron. Frau Europe's authority has been damaged.

It was not just that she was forced to back down when she suggested other names apart from that of Mr Juncker should be considered for the top job.

She flinched as some outraged German columnists pointed out that during the campaign she had told voters the election would determine the next Commission president.

Although much of the German political establishment has seen a strengthening of the European Parliament as one answer to the EU's democratic deficit, Chancellor Merkel is said to be uncomfortable at a shift in power towards the European Parliament which could weaken the ability of heads of government to define the agenda.

There is already a fall-out from the battle over the Commission presidency.

The centre-left in Europe, led by Italian Prime Minister Matteo Renzi and President Francois Hollande of France, have seized an opportunity to push their case for a change of course in Europe. Yes, they have agreed to back Mr Juncker but in exchange for a commitment to support their growth agenda.

The centre-left wants a more flexible interpretation of the EU's budget and deficit rules.

1) The people of the EU voted for their chosen MEPs.

2) The MEPs belong to political parties on a national level, UKIP, Labour, Christian Union etc etc.

3) In the EU, the national political parties form alliances based on broadly agreed political principles: the centre left, the centre right, the extreme right etc. etc.

4) The parties of the centre right won the highest number of seats in the EU parliament, (the highest number of MEPs); thus it is the centre right parties, formed into a political bloc known as the European People's Party who get to nominate their candidate for EU President.

5) Their nomination is Claude Junker. And David Cameron et al don't like Claude Junker so they are attempting to back pedal on agreements they made over six years ago, and ride roughshod over the democractic coice of millions of Europeans.

Millions of Europeans who did understand the importance of these elections because their media aren't all ran by capitalist psychos who are hell bent on ensuring government does best for their shareholders and rich chums in the corporate world.

They are meant to be the powerhouses of Europe, but the latest figures show that the “core” economies of France and Germany are faltering while growth in the rest of the eurozone is at its strongest since pre-recession levels.

France’s economy was hit by a steep downturn, and in Germany the pace of expansion was at its weakest in eight months, according to a flash reading of most recent Purchasing Managers’ Index (PMI) report by Markit.

Across “peripheral” Europe - including the countries that were hit the hardest by the global financial crisis - output accelerated and growth is at the strongest since August 2007.

Chris Williamson, chief economist at Markit, said that these divergent trends between the “core” and “peripheral” countries of Europe were a “big concern”.

He said: “Although the survey suggests the eurozone as a whole should grow by at least 0.4pc in the second quarter, France appears to be entering a renewed downturn after GDP stagnated in the first quarter.

“Germany meanwhile looks set to grow by 0.7pc or more in the second quarter, albeit with signs that the upturn is starting to lose momentum again.

“It is the rest of the region, outside of France and Germany, which – as a whole – is seeing the strongest growth momentum at the moment, highlighting how the ‘periphery’ is recovering.”

The PMI report showed that in France, business contracted for the second month running ad suffered the steepest downturn with headcounts cut at the fastest rate since February.

Despite the slow increases that were recorded in both the manufacturing and service sectors in Germany, the latter remained optimistic about prospects for output growth in the year ahead, with positivity hitting a three year high.

Elsewhere across the eurozone, new orders showed the largest increase since July 2007.

Aengus Collins, Europe analyst at The Economist Intelligence Unit, said that the PMI figures for France “paint a picture of an economy in trouble”.

He said: “France is a particular worry, slumping to a reading of 48. Real GDP stagnated in the first quarter - propped up by government spending - and a host of indicators point to continuing weakness in the private sector.

“There is now a real prospect that the economy contracted in the second quarter, and that a return to solid growth remains some distance off.”

Eimar Daly, head of market analysis at Monex Europe, said that the PMI report showed that weakness in the Eurozone was “mainly isolated in France”.

She said: “The most optimistic point of the recovery was the continued resurgence of the periphery.

“This underlines that the periphery is catching up with the core and the dangerous precedent of a two tier Eurozone, a sluggish periphery heavily indebted to the robust core, is changing.”

MOSCOW — The French are sending Russia advanced helicopter carriers. Germans built it a high-tech military training facility. Italians have been shipping armored vehicles. Deep into a crisis in which Russia’s military deployed on Ukrainian soil, European nations are struggling to balance economic considerations with political ones. Now France is poised this month to invite 400 Russian sailors to train on a massive new ship that a Russian admiral once said would have enabled his nation to beat neighboring Georgia in its 2008 war in “40 minutes instead of 26 hours.”  French leaders have refused to cancel the $1.7 billion sale of two Mistral-class helicopter carriers — capable of transporting 16 attack helicopters, dozens of tanks and 700 soldiers — despite Russia’s recent aggression, including its annexation of the Crimean Peninsula in March. The plans have drawn condemnation from allies including the United States and NATO, which say that supplying military equipment to Russia with one hand while condemning its military actions with the other is clearly contradictory.  The Mistral deal and other arms shipments lay bare the difficulty of applying pressure on Russia, even at a time when tensions between the West and Russia are at their worst since the Cold War.  European leaders have sought to protect their defense industries even as they have sanctioned Russian officials over the Crimea annexation. “We are executing the contract in full legal compliance because we’ re not at that level of sanctions,” French President François  Hollande told reporters this month. If sanctions escalate, he said, France may hold back on sending the ships.

Obama said this month: “I have expressed some concerns, and I don’t think I am alone. . . . I think it would have been preferable to press the pause button.”

Still, no nation has stepped forward with money to help France avoid shouldering the financial burden of any cancellation alone. That, too, demonstrates the difficulty of achieving a unified Western response to Russia’s actions in Ukraine, analysts said.

Just a few years ago, Russia’s military almost never bought equipment made outside the Soviet bloc. Even today, Russia remains a major arms exporter. But after Russia’s brief war with neighboring Georgia in 2008, top leaders rethought their old habits. Although Russia ultimately prevailed in that conflict, its soldiers proved ill-equipped and disorganized, struggling with Soviet-era equipment that failed them on numerous occasions. So leaders turned to the West to boost their capabilities.

“At the highest level they found that the Russian equipment didn’t live up to their expectations anymore,” said Pieter Wezeman, a senior researcher at the Stockholm International Peace Research Institute (SIPRI), which tracks arms transfers. The Russians began “buying not just complete weapons systems but also technology,” he said.

They found a continent that was eager to oblige. The 2008 global financial crisis and Europe’s subsequent economic struggles made policymakers desperate for any chance to boost jobs and exports.

Although precise figures are shrouded in secrecy and difficult to compile, France was the most enthusiastic trading partner, analysts say. Germany, Italy and the Czech Republic have also been involved in selling equipment to Russia in recent years, according to data compiled by SIPRI. The sales involve aircraft, armored vehicles and communications supplies.