Eurozone out of record recession

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Eurozone out of record recession

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The Eurozone is on the road to recovery, and it is France and Germany who are in the driving seat.

Figures show a 0.3 percent growth in GDP in the second quarter after an 18 month recession, the longest to date.

Germany posted growth at 0.7 percent, much stronger than predicted and France was not far behind with 0.5 percent growth, boosted largely by the manufacturing sector.

The European Commission hopes the keep up the momentum.

“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,” announced Commission spokesperson Chantal Hughes.

But the figures mask the fragmented nature of the recovery. Spain’s GDP fell by 0.1 percent, and Italy and the Netherlands dropped by 0.2 percent.

“Germany is booming, France is doing OK but you’ve got to look southern Europe and they are in real dire straits. So you’ve got this two tier Europe and Germany really controlling the austerity while it’s booming. So I think it’s not the eurozone problems being solved,” explained Head of Trading at ETX Capital, Joe Rundle.

Over in Portugal where belt-tightening measures were part of an international bailout deal, the country posted 1.1 percent growth. Bur it is unclear whether the single currency bloc can sustain growth.

Brussels fears a jobless recovery, where companies put off hiring to keep costs down, which could lead to another slump.