The record 18-month recession is officially over in the Eurozone, as growth in France and Germany overwhelmed ongoing contractions elsewhere in the area during the second quarter of the year. Data released Wednesday show that as a whole, the 17 economies that use the euro expanded by 0.3 percent from April to June.
Germany recorded 0.7 percent GDP growth and France notched a 0.5 percent growth rate. The two countries are generally the engine of the Eurozone economy. The strongest growth rate in the data came from one of the currency union’s smallest economies: Portugal grew 1.1 percent during the quarter. The Dutch economy contracted, as did the Spanish, Italian, and Greek economies.
Austerity’s failures helped knock the region into a double-dip recession, and even as it emerges with Wednesday’s numbers, it faces a massive climb just to get back to output and unemployment levels from before the crisis. Relaxed austerity requirements in recent months have been key to returning the area to growth.
And there is still economic trouble in many countries. The divergent experiences of the different national economies that make up the Eurozone reflect the cycle of bailouts, austerity, and economic collapse that has plagued the union’s southern members. Greece’s economy is a full 23 percent smaller than it was at the outset of the global financial crisis. Italy has been in recession for two full years. The spending cuts, layoffs, and often regressive tax increases imposed by central European authorities in these countries haven’t just created public health crises and spiked unemployment up over 12 percent. They’ve also failed at their core goal of reducing the region’s debt level, which now stands at an all-time high.
As Europe has at least partially regained its economic footing by easing off the counterproductive cut-and-grow policies of austerity, American policymakers have done roughly the opposite. Sequestration is causing “excessively rapid” cuts that undermine the economy both now and in the future, according to the International Monetary Fund. Federal budget crunchers say canceling the haphazard cuts would add around a million jobs and a percentage point of GDP growth. But Republican leaders continue to reject even a temporary reversal of the wrongheaded policy.