Early End to the Recession for Germany and France
Surprisingly, France and Germany have shown economic growth this year in the second quarter. This dramatic change for the two countries means that their recessions are ending much earlier than many have projected. The German GDP went up over a quarter of a percent, which ended the country’s largest depression in over fifty years. The French GDP also grew over a quarter of a percent when it was predicted that they would actually fall a quarter of a percent in the second quarter.
Although Germany and France saw growth and a raise in their GDP, not all European countries received the same outcomes. Italy, Austria, Belgium and the Netherlands all reported shrinking economies in the second quarter. Despite these falls in GDP, however, both Portugal and Greece also saw increases in growth in the second quarter.
The growth these countries are showing indicates that the worst may be over. The damage caused by the U.S. housing market collapse almost a year ago and the financial crisis of the past year have caused waves of financial turmoil around the globe. Many economists feel evidence is strong in that the economy is picking up again, and Germany and France help to prove this.
The Federal Reserve agrees that the financial crises and recessions experiences around the world have been showing signs of coming to a plateau. Many people who originally experienced shock to the economic crises are not overcoming their original fears as the market starts to repair itself. In fact, the news of the recession coming to an end for several countries has lead to more confidence in the market.
England has not been as lucky as its neighbors, but the Bank of England still states that England should be seeing an end to its own recession at the beginning of next year. Britain has experienced a 0.8 percent shrinking of their economy in the same quarter where the GDPs for France and Germany rose.
The encouraging upward trends seen in Germany and France have some economists worried that people may become overconfident. Though the end of the recession for these countries is certainly a step in a positive direction, economists know there is still quite a way to go before either of these countries can see improvements that match their economies just a few years ago. There is still a chance for more layoffs and restructuring while their economies build themselves back up again.
Overall, these positive trends have given a lot of hope to economists and officials that the recession around the world is slowly coming to an end. They are cautious, however, as these and many other countries still need to see unemployment levels decline and build their banks back up again. Banks around the world are still in bad shape and are not lending as much as they should to boost their economies. It seems that even though most countries have a long way to go, these new positive developments have added to the idea that we are over the deepest part of the recession and can still avoid total collapse.
