The Recovery Rolls On As Germany And France Post Postive GDP

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The recession in Europe was supposed to last until next year, but it has not turned out that way. The GDPs of Germany and France each grew by .3% in the second quarter, figures that stunned even most optimists. The data is an indication that the recovery in the large European nations is outpacing the one in the US.

The trend could have far-reaching effects. The US is a major trade partner with the EU. If business activity in Europe is picking up, so should the rate of American exports to the region, further driving up US GDP.

The most substantial benefit of new European expansion will probably go to China. The stimulus package there still accounts for most of the nation’s grow because factory production and exports are still low. A resuscitated European economy will push demand for Chinese goods back up again, and quickly.

The news from German and France makes the theory of some economists that the global recovery is “V-shaped” more plausible. Only a few weeks ago, many experts expected that the first real economic growth in the West and Japan would not take place until the very end of this year or the first quarter of 2010.

Happy days are here again.

Douglas A. McIntyre

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