Italy and France have both seen dips in their industrial sectors. As Ciara Lee reports it's put a dampener on recent signs of recovery.
Italian Prime Minister Matteo Renzi welcomes Russian President Vladimir Putin to Rome. Russia enjoys better relations with Italy than most other EU countries. But the Italian leader offered no sign of breaking ranks with international partners over EU sanctions against Moscow. He also has his own economic issues to deal with. Italian industrial output fell unexpectedly by 0.3 percent in April. It puts a dampener on the country's outlook as it's closely linked to GDP. But Barclays' Will Hobbs says there are still encouraging signs for the euro zone's third largest economy. (SOUNDBITE) (English) WILL HOBBS, BARCLAYS WEALTH, SAYING: "The PMIs suggest that industrial output should soon sort of perk up a little bit. And I think here importantly we've seen a turn in the labour market and broadly speaking the macro economic data there looks more encouraging than worrying I think more recently. The trend seems to have changed a little bit more recently." Over the border in France, industry ouput was also on the slide. The sector fell 0.9 percent between March and April. Dips in aerospace, auto and textiles contributed to the fall. It could cast doubt over the strength of the economy's recovery. But France is taking steps to help. It's announced a set of measures to encourage small firms to hire by making labour rules more flexible and cutting costs. (SOUNDBITE) (English) WILL HOBBS, BARCLAYS WEALTH, SAYING: "I think France will benefit as the year gets older from a more helpful international backdrop, certainly with the US economy now more convincingly beyond the pothole it struck in the first quarter. And also intra-Europe trade, it feels like with banks starting to take cross border risk again and Germany certainly looking very healthy with the jobs market looking very good." The package aims to tackle unemployment - it's stuck above 10 percent and is a major challenge for President Francois Hollande. He has said he will not seek a second term if unemployment has not dropped by the end of his term in office.