According to Eurostat, Europe is going through a difficult period with economies of euro area member countries stagnating in the second quarter. Such a situation means the region is facing recession. The euro area GDP rose 0.7% on a yearly basis versus expectations for a 0.1% increase. As expected, the second-quarter stagnation was offset by positive figures in Q1. Then, the euro area economy grew 0.2% from the previous three months, while annual growth came in at 0.9%.
“With the geopolitical tensions not cooling down for the time being, there is little likelihood that the growth pace will accelerate in the second half of the year. Big decisions on more unconventional policy measures will have to await 2015," said Peter Vanden Houte, chief euro zone economist at ING.
Germany, Europe’s largest economy contracted by 0.2% on the quarter, the German Statistics Office said. France fared little better, flatlining for the second successive quarter, according to national statistics office Insee.
The whole picture shows that the Europe’s record-long recession ended in April-June 2013 and was followed by temporary growth for four quarters in a row. However, the EU countries are still dealing with the consequences of the crisis, including high unemployment and inflation at a four-and-a-half-year low. According the European Commission's growth outlook released in May, the eurozone’s GDP will grow 1.2% in 2014 and 1.7% in 2015.
