Markets impressed but ECB remains cautious

The eurozone emerged from an 18-month long recession in the second quarter of this year when GDP rose by 0.3%, the first increase since the third quarter of 2011. This was a double-dip recession as it followed soon after the very severe recession of 2008-2009.

The recessions have left the eurozone economy in a very weak state. The unemployment rate has climbed to over 12%, while output is 3% below what pertained ahead of the 2008-09 recession.

The GDP data for quarter two are encouraging in that they show a broad-based recovery in activity. All the main components of domestic demand — consumer spending, fixed investment and government expenditure — showed growth, while net exports also contributed to the rise in GDP. Both the manufacturing and services sectors expanded.