The eurozone economy has been shrinking since the last quarter of 2011 as a raging debt crisis prompted many countries to pursue tough austerity policies that weighed on economic activity and confidence.
However, many analysts think figures next month will show the region may have eked out a modest growth during the second quarter, thanks mainly to a rebound in Germany, Europe’s biggest economy.
On top of that, other countries’ output – even for those at the forefront of Europe’s debt crisis – do not appear to be contracting on such a large scale as earlier on in the year. Figures this week showed that the Spanish recession nearly ended in the second quarter while there are hopes that even Greece may start growing again at the end of this year following a recession that’s wiped out around a fifth of the country’s output.
One of the most damaging effects of the eurozone’s return to recession has been an inexorable rise in unemployment particularly of the young. Over the past year, unemployment among the under 25s increased by 1.13 million.
The latest figures, from EU statistics office Eurostat, are only one month but they do provide some hope that there is now light at the end of the tunnel. In Spain, for example, the number of unemployed fell to 5.96 million from the previous month’s 6 million and that pulled the jobless rate down to 26.3 per cent.
Overall, the unemployment rate in the eurozone was also lower than expected.