Euro Zone Escapes Crisis and Ends Recession, But It's Not Over Yet
The eurozone, containing 17 European countries of the European Union, announced that the economic union had experienced 0.3% growth in the second quarter of 2013. This beat expectations of 0.2% growth by 0.1%. To many this was the signal that the recession in Europe was finally officially over. Nevertheless, the news came with announcements that unemployment was still 12.1% in June, a disappointing number that reveals the economic stress still pushing on the eurozone. Although the eurozone as a whole may have officially escaped the recession, there are countries within the region that still embody the struggle against economic collapse such as Greece, the Netherlands, Italy, and Spain. It is unclear whether optimism is warranted especially considering the ever present possibility of a triple dip economic recession, where the triple dip would be a full-out depression.
"We've had a signal that the worst ... is behind us, we're entering a new period ...," Jean-Michel Six, managing director at Standard & Poor's explained, "which is likely to be a long period of sluggish recovery, very slow growth but still very weak." The 0.3% growth was buoyed by the economic giants Germany and France. Netherlands, Spain, and Italy all continued their economic contraction streaks. Southern Europe's economies are still slumping even with austerity as a result of huge debt to GDP ratios from bailouts. Thus, the euro zone is continuing to feel the political strain, as Germany and France have become the lifesavers that keep the rest of the Zone afloat. According to the Wall Street Journal, "budget austerity, lack of affordable bank loans, rising unemployment ... weak household incomes, and lack of investment," have contributed to the reeling economy of Europe that at any moment can tailspin into a full-on depression.
"The ... economic growth in the euro zone as a whole won't address the deep-seated economic and fiscal problems of the peripheral countries," analysts from Capital Economics said. The region still is feeling the heat from the various failing European countries, and these countries could melt the growth of the overall economy in an instant should more bailout funds be needed. Europe should seek to act carefully and deliver individualized government sponsored legislation that will seek to encourage investment from abroad in Europe. The chance of a triple dip recession or a full-out depression would be severely curtailed.