21 May, 2011 @ 09:00
1 min read

EU economy is finally on the up

THE EU economy has finally shown strong signs of recovery.

The first quarter shows an encouraging Eurozone growth of 0.8 per cent, the highest rate since 2007.

It comes thanks to strong growth in France and Germany – the two largest economies in the EU – which together account for nearly half the region’s economic output.

It now means the European Commission has upgraded its growth predictions for the year, stating prospects are ‘slightly better’ than six months ago.

But problems could arise as economic recovery is still very uneven.

The spread varies from 1.5 per cent growth in Germany, 1.2 per cent growth in Sweden and one per cent in France to a retraction in Ireland and Portugal.

According to the National Statistics Institute in Madrid, Spain actually made modest economic progress with a growth of 0.3 per cent on the previous quarter.

The figures were slightly better than expected and were attributed to strong exports, making up for the weak domestic demand and high unemployment.

Deputy Prime Minister Alfredo Perez Rubalcaba however said that the growth was ‘perfectly compatible’ with the Government’s predictions of 1.3 per cent growth this year.

Meanwhile analysts are now saying sustained strength in the German economy – which grew by 4.8 per cent in 2010 – will put pressure on Berlin to provide more financial aid to indebted euro zone partners such as Greece and Portugal.

Portugal is now the only EU country that remains officially in recession with a fall in GDP of 0.7 per cent this year so far.

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