End of the recession

The euro zone as a whole is growing. The 0.3-percent growth recorded in the second quarter of the year by the European Union’s statistics agency, Eurostat, is higher than the majority of predictions. The contribution of Germany and France to ending the recession, which began in the 17 economies that make up the single-currency area in 2011, has been decisive. Even so, abandoning the territory of negative growth does not mean the recovery will be sufficiently strong to correct the main imbalance in the region — unemployment — at a significant pace, nor that the financial problems of some periphery economies can be considered overcome.

But the improvements in the two biggest European economies should unquestionably make the transition of those of Italy and Spain — now the center of attention — back to growth easier. The biggest surprise was the growth of France’s GDP, which increased 0.5 percent in the second quarter with internal demand the biggest driving force. However, it will not be enough to avoid the Gallic economy ending the year with an overall contraction — of between 0.1 and 0.2 percent, the IMF predicts — before growing by 0.8 percent next year.

Germany’s lurch forward is also surprising. The strongest economy in Europe recorded a growth rate of 0.7 percent, the biggest quarterly increase in more than a year, thanks to the intensity of internal demand and, within that, of public consumption and construction spending. Portugal also said goodbye to two-and-a-half years of recession with growth of 1.1 percent in the second quarter. But that’s where the positive surprises end. The Dutch economy, which had made a great show of its austerity policies, again recorded a negative figure of 0.2 percent. The negative rates of GDP growth in Spain and Italy are 0.1 and 0.2 percent, respectively.

You don’t need to know the detailed composition of the growth in each of the economies to remain wary about its continuation. And, in any case, about its effectiveness in reducing the region’s raised unemployment in a significant way, especially in those southern countries that have been most punished by the crisis and the application of fiscal adjustment policies that have worsened it.

It will be precisely those budgetary policies that will go on weighing down the force of the recovery in economies such as those of Italy and Spain, which also need to free themselves of the threats hanging over their banking systems. Financial fragmentation, the difficulties in accessing credit and the absence of public and private investment continue to weigh heavily at the hour of exiting the recession. How this is confronted will depend upon the exit from a negative rate of growth not being followed by an outlook close to stagnation. Going on firming up the transition to banking union and promoting investment projects across the European Union will contribute to these positive signs in the second quarter establishing themselves definitively.