Europe: Powerhouse Germany drives better figures in eurozone

Europe's economic growth has exceeded expectations thanks to record-breaking gains in Germany.

The 16-nation eurozone grew by one per cent in the second quarter – up from 0.2 per cent in the first quarter, and higher than market expectations of 0.7 per cent growth.

The figures from the European Union statistics agency Eurostat, published yesterday, also showed that on an annual basis, the eurozone economy grew by 1.7 per cent.

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Germany set the bar as it reported a higher-than-expected growth rate of 2.2 per cent in the second quarter.

The rate of output – the fastest pace seen in Germany in two decades – is twice the 1.1 per cent improvement seen in the same quarter in the UK.

Carsten Brzeski, an economist with ING in Brussels, said the figures were a "clear sign the eurozone coped with the sovereign debt crisis better than expected" but added that the "eurozone growth story is still pretty much a German export story".