Guten Morgen and welcome to Europe Express, your daily guide to what matters on the continent. Today, we’re stopping in Frankfurt to have a look at how fast the eurozone economy is expected to rebound from the dual squeeze of the pandemic and extended lockdowns. Official gross domestic product data will be released later today, and our bureau chief in the German financial capital has a good sense of where things are headed.

Staying in Germany, the Christian Democrats in the state of Thuringia will decide tonight whether to choose a highly controversial rightwing candidate to run for a Bundestag seat in upcoming parliamentary elections — a test case for chancellor candidate Armin Laschet’s leadership of the party.

And, as we plan to every Friday, we have a few smart reads — think-tank reports, opinions and analyses for you to enjoy over the weekend. Featured today is an in-depth look at how diplomatic expulsions are shrinking Russia’s influence in eastern Europe.

How has the eurozone economy fared this year under the weight of the coronavirus pandemic and the measures imposed to contain it? Economists expect official figures to be released today to show that gross domestic product in the bloc fell for a second consecutive quarter, writes FT Frankfurt bureau chief Martin Arnold.

Line chart of Eurozone economic sentiment indicator (long-term average = 100) showing Recovery expectations on the rise

“It is looking like a double-dip recession in the first quarter,” said Katharina Utermöhl, senior economist for Europe at the German insurer Allianz, which expected eurozone GDP to have fallen 0.5 per cent in the first three months of the year compared with the previous quarter.

The probable drop in output, which would follow a decline of 0.7 per cent in the fourth quarter, would hardly be surprising given that much of Europe has remained under varying levels of lockdown for much of the first quarter to contain a third wave of Covid-19 infections.

Yet compared with the quarterly growth of 1.6 per cent reported by the US on Thursday and 0.6 per cent growth announced by China two weeks ago, it would make Europe’s economy look like a laggard in the global race to rebound from the pandemic.

Optimists can nevertheless draw some succour from early data published yesterday that suggested Europe’s economy might be more resilient than many thought, and that it is poised to start a speedy recovery of its own very soon.

Sweden and Belgium published first-quarter GDP figures that outstripped expectations, with growth of 1.1 per cent and 0.6 per cent, respectively, suggesting that other European countries might not have suffered as badly as feared.

Expectations are also rising that the eurozone will rebound strongly in the second quarter of this year, with consumers unleashing a wave of pent-up spending once countries start lifting containment measures and vaccinations pick up speed.

This upbeat mood was confirmed yesterday by the European Commission’s monthly survey of businesses and consumers, which showed confidence surging well above expectations to its highest level in over two years.

“We have pencilled in an economic resurrection for the second quarter,” said Utermöhl, with a forecast of 1.4 per cent growth. “The consumer is in the starting blocks and just waiting for the starting gun. Then we’ll see a super boom.”

Line chart of € per tonne  showing EU carbon trading prices surge

It is not often that south-western Thuringia grabs national headlines in Germany. This evening is a rare exception, writes FT Berlin bureau chief Guy Chazan.

For one day only, political junkies will have their eyes trained on electoral district 196, a small corner of Thuringia where local Christian Democrats are expected to elect Hans-Georg Maassen, Germany’s former spy chief, as their candidate for September’s federal election.

Maassen is one of the country’s most controversial politicians. In 2018, after a man in the eastern city of Chemnitz was killed and a Syrian and an Iraqi identified as suspects and arrested, people in the town reacted by chasing and attacking migrants in the streets amid violent protests. Angela Merkel condemned the riots; Maassen appeared to suggest they had never happened.

Liberals accused him of downplaying xenophobic violence and within days, he was forced to resign. But he has since re-emerged as a darling of the political right, lionised by the ultra-conservative wing of Merkel’s Christian Democratic Union. His fan base is particularly strong in the eastern state of Thuringia, the scene of this evening’s closely watched election.

Maassen’s nomination would represent a big headache for Armin Laschet, the CDU’s beleaguered leader. Laschet has just won a punishing power struggle with Bavarian prime minister Markus Söder to run as the centre-right’s candidate for chancellor in September’s elections. The battle exposed deep divisions both between the CDU and its Bavarian sister party the CSU and within the CDU itself. Now, Laschet faces another divisive issue: the backlash that would inevitably accompany Maassen’s selection.

For many in the CDU, Maassen epitomises one of the party’s biggest problems: the ideological affinity many members have with the far-right Alternative for Germany. The party leadership has prohibited any co-operation between the CDU and the AfD. But many in the east are openly pushing against this cordon sanitaire. Local CDU politicians in the east would be happy to form coalition governments with the AfD, with whom they often have far more in common than with local Social Democrats, liberals or Greens. Maassen is their man.

Centrist CDU MPs fear that Maassen’s nomination could be a harbinger of things to come. Their worry is that the CDU of the post-Merkel era could gradually drift to the right, and Laschet — a weak leader who has yet to stamp his authority on the party — would be powerless to stop it.

“What if we lose the election and the CDU/CSU parliamentary group ends up dominated by people like Maassen?” said one CDU backbencher. “We’d be in danger of becoming some kind of rightwing rump party.”

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