Aug.14 - Strong growth in Germany and France has helped the euro zone emerge from a record 18 months of recession to date in the second quarter, confirming expectations a fragile recovery was under way. Ciara Sutton reports.
A recovery is underway in Europe. That's the news out of the euro zone as it tentatively returns to growth after its longest ever recession. Stronger GDP in the region's two largest economies, Germany and France, helped the bloc grow by 0.3 percent in the second quarter, ending 18 months of contraction. Crisis over? Not so fast says head of trading at ETX Capital Joe Rundle. (SOUNDBITE) (English) HEAD OF TRADING AT ETX CAPITAL, JOE RUNDLE, SAYING: "Germany is booming, France is doing OK but you've got to look southern Europe and they are in real dire straights. 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 euro zone problems being solved." Confirming that fragmented picture Spain's economy shrank by 0.1 percent, with 0.2 percent for Italy and the Netherlands. Bailed out peer Portugal posted over 1 percent expansion, the fastest growth in the euro zone in the three months to June. The bloc's performance in the second quarter beat economists expectations of 35 economists, but the EU commission was quick to put things in persepective. (SOUNDBITE) (English), EU COMMISSION SPOKESPERSON, CHANTAL HUGHES, SAYING: "This slightly more positive data is welcome - but there is no room for any complacency. Self-congratulatory statements suggesting that the crisis is over are definitely 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 euro zone now faces a bumpy recovery, dented by record joblessness and belt-tightening austerity in peripheral countries, intended to boost growth and create new jobs.