European Union emerges from recession
Sunday, November 15, 2009
The European Union has emerged from its worst recession since World War II, with the announcement on Friday that the region posted a modest growth in the third quarter. Despite the news, some EU economies including Spain and the United Kingdom are still struggling.
Both the European Union as a whole and the sixteen EU countries sharing the euro currency (the “eurozone”) posted positive growth, at 0.2 percent and 0.4 percent, respectively. This follows five consecutive quarters of negative growth. The data was published by the European statistical agency Eurostat and announced by the European Commission in Brussels.
Two of Europe’s biggest economies, France and Germany, helped drive the overall growth. French Finance Minister Christine Lagarde announced the French economy had grown 0.3 percent in the third quarter, and predicted it would enter 2010 with its old momentum.
In an interview on French radio, Lagarde said the fact the French economy had posted two successive quarters of positive growth showed it was turning around. She also noted that the labour market had only shed 5,000 jobs in the last quarter, far fewer than at the beginning of the year. Speaking from Singapore, Lagarde predicted Asia would drive the world economic recovery — but she also said it was important to continue government economic stimulus measures through 2010.
Germany’s economy grew 0.7 percent in the third quarter and Italy and the Netherlands also posted an upturn. Lithuania recorded the biggest growth — up 6 percent in the third quarter.
However the economies of both Spain and the United Kingdom shrunk in the same quarter. The UK’s Office for National Statistics initially estimated a fall of 0.4 percent in British output, though this could be revised. Britain had widely been expected to show growth in the third quarter. Eurostat figures also showed that unemployment in Europe overall rose to 9.7 percent in September — the highest in 20 years.
Some economists believe that growth in Europe and the United States may slow or even reverse in 2010, in a so called “double-dip”. Howard Archer of IHS Global Insight warned that the end of some government stimulus such as car scrappage schemes could cause a “loss of momentum”. Dominique Strauss-Kahn, head of the IMF, disagreed, predicting in a statement from Singapore that 2010 would be a global “year of recovery”.