The Economist explains: Why the euro zone is recovering

Posted: April 1, 2015 in economy
Tags: , ,

SIGNS are multiplying that the euro area is at long last making a robust recovery. An indicator of business and consumer confidence compiled by the European Commission has reached its highest in March since July 2011. A survey of purchasing managers shows the strongest growth in private manufacturing and services for almost four years. In another welcome development, the unemployment rate fell to 11.3% in February, the lowest since May 2012. Why is the euro area recovering?In fact a recovery of sorts has been under way since the spring of 2013. That was when the euro area finally emerged from its double-dip recession, which though more shallow than the first recession caused by the financial crisis, lasted even longer. But the recovery has been weak and faltering, so much so that a committee of economists that dates euro-zone business cycles was reluctant last summer to call it anything more than a “prolonged pause” in the recession. The strongest growth in any quarter has been a mere 0.3%, an annualised rate of 1.2%, and the recovery slowed last spring to just 0.1%. As a result, euro-zone output in the final three months of December was still 2% below its previous peak, in early 2008. By contrast, American GDP was nearly 9% higher than its pre-crisis peak (in late 2007).But now it looks as if the recovery is finally gathering strength. Already, in the final three …<div class="og_rss_groups"></div>

via Economic Crisis


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