Mecklai: Euro zone slowly coming out of stagnation

Mecklai graph of the day: European optimism

The euro zone has struggled with recession since 2011 as Greece sunk into an abyss of deep financial debt due to which ECB (European Central Bank) has used monetary tools to provide support to the recession hit euro zone like LTRO (long term refinancing option) which would pump in cheap money into the European markets to revive the economic/business activities and help the troubled banking sectors.

The euro zone now seems to be slowly coming out of stagnation with Greece showing signs of recovery and now France and Germany have recorded an increase in their (Gross Domestic Product) as the French GDP rose from -0.20 percent in the first quarter of 2013 to 0.50 percent in the second quarter and German rose from 0 percent in the first Quarter to 0.70 percent in the second in 2013. Even the German and European Zew sentiments came out positive at 42 in Aug against 36.3 in July 2013.This optimism has pushed up the industrial productivity and the consumer spending further rolling the market out of its shackle bound recession. German exports have contributed to almost 69 percent of the complete euro zone exports and their domestic demands also seem to be consistently rising. After many had lost because of a debt burdened Greece and Italian and Spanish Fraud –corruption allegations, this positive set of data releases have completely reset the economic outlook.

If the same kind of optimistic sentiment persists further we could see the World's largest trading bloc stand back on its feet sooner than we could imagine.

Below graph represents French GDP and German GDP

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