Eurozone growth takes bloc out of recession

14 Aug 13
The combined economies of the eurozone countries grew by 0.3% in the second quarter of this year, taking the bloc out of recession after 18 months, according to figures published today by Eurostat.

By | 14 August 2013 

The combined economies of the eurozone countries grew by 0.3% in the second quarter of this year, taking the bloc out of recession after 18 months, according to figures published today by Eurostat.

The European Union as a whole also grew by 0.3% in the same period, the figures show.

This is the first growth in the eurozone since the third quarter of 2011. However, its economic output remains 0.7 percentage points lower than the same quarter of 2012.

Across the currency’s 17 countries, the largest quarter-on-quarter growth was recorded in Germany and Finland, which both grew by 0.7%. However, four countries – Cyprus, Italy, the Netherlands, and Spain ­– remain in recession after their individual economies contracted in the three months to June. Greece and Ireland are among countries that have not yet published figures for the second quarter.

Responding to the figures, the vice president of the European Commission, Olli Rehn, said the data was ‘encouraging’ and suggested the European economy was gradually gaining momentum.

He added: ‘This slightly more positive data is welcome - but there is no room for any complacency. Self-congratulatory statements suggesting 'the crisis is over' are not for today.

‘There are still substantial obstacles to overcome: the growth figures remain low and the tentative signs of growth are still fragile, the averages hide important differences between member states, [and] a number of member states still have unacceptably high unemployment rates. So there is still a very long way to go.

‘A sustained recovery is now within reach, but only if we persevere on all fronts of our crisis response: keep up the pace of economic reform, regain control over our debt, both public and private, and build the pillars of a genuine economic and monetary union.’

David Brown chief economist of the New View Economics consultancy said the figures were 'better than expected'.

He added: 'After six quarters of unrelenting recession misery, the Eurozone has finally broken back into positive growth. It is going to be a very long, hard haul back into sustainable, strong growth again.

'It is a tale of two very different economies. Germany is doing all the hard work in the vanguard of strong recovery as its 0.7% quarter 2 gross domestic product expansion showed. On the other side of the equation, the troubled Eurozone economies are still mired down in the mud of deep recession risk. That risk will persist while heavy austerity policies continue pose a severe constraint on economic demand.'

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