German Finance Minister Peer Steinbrueck
German Finance Minister Peer Steinbrueck - 
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JEREMY HOBSON: Germany said this morning that its economy only grew .10 percent last quarter. That's far less than economists were expecting. And it's just the latest big economy to report stagnant growth. For more on this, we turn to Simon Tilford, who's chief economist with the Center for European Reform. He joins us from London. Good morning.

SIMON TILFORD: Good morning.

HOBSON: When you look at the number -- 0.1 percent growth, then you look at France, 0 percent growth, Japan, negative 1.3 percent, the U.S., 1.3 percent -- are we heading into a global recession here?

TILFORD: I think in terms of the Western, developed industrial economies, we're in a depression, frankly. It's very hard to see where growth is going to come from over the next few years. Governments have tapped out, they can't borrow. Monetary policy is as loose as it can be, interest rates can't be cut any further. The bottom line is there's a massive amount of debt that needs to be addressed.

HOBSON: Well, how can we go from what economists called a global recovery, into, as you say, a depression?

TILFORD: I think all talk of recovery of the last 18 months has been exaggerated. Many developed economies still haven't recovered their pre-crisis levels of economic activity. The U.S. is marginally above its pre-crisis level; Germany is marginally above; France, the U.K., Italy, Japan, well short of pre-crisis levels of output.

HOBSON: What does this mean in the immediate -- the fact that Germany's economy is only growing at this rate, far less than what economists had been expecting. What does it mean for Europe right now?

TILFORD: It could be positive in that what's been happening over recent months in Germany is a sense of invulnerability, if you like. The German government has said, to be honest, whatever happens in the Eurozone, we're going to be OK because our economy is growing, we're doing very well in emerging markets, etc., etc. -- now that the German economy has stalled, I think that we will see a more informed debate in Germany about what to do about the edbt crisis.

HOBSON: Simon Tilford, chief economist with the Center for European Reform. Thanks for joining us this morning.

TILFORD: Thank you.