Europe broke out of recession in the second quarter of the year, official data showed amid stronger domestic demand in France and Germany, ending a six-quarter downturn that has sapped confidence and thrown millions of people out of work.
The gross domestic product of the 17-nation eurozone grew by 0.3 per cent in the April-June period from the previous three months, when the economy contracted by 0.3 per cent, according to a report from Eurostat, the statistical agency of the European Union. That was slightly better than the 0.2 per cent growth that economists had been expecting.
On an annualised basis, the eurozone grew by about 1.2 per cent in the second quarter, short of the 1.7 per cent second-quarter showing by the US and 2.5 per cent in Australia, but nonetheless a relief for Europe, which has weathered an unemployment rate that has risen to 12.1 per cent and a sovereign debt crisis that raised existential questions about the euro currency.
"It's not the end of the problems," said Ralph Solveen, an economist at Commerzbank in Frankfurt. "But the technical recession is over."
The economy as a whole of the European Union, which consists of 28 nations, also grew by 0.3 per cent in the second quarter.
Germany grew by 0.7 per cent, after stagnating in the first quarter. The gains were led by demand from households and government, the Federal Statistical Office reported from Wiesbaden.
France, which had declined for the two previous quarters, posted 0.5 per cent quarterly growth, as household spending grew and companies increased exports of goods and services, although investment declined slightly.
Portugal, racked by austerity-induced recession and the recipient of a bailout from the troika of the European Commission, European Central Bank and International Monetary Fund, was the biggest surprise in the data. The economy there expanded by a robust 1.1 per cent in the quarter.
Spain's economy shrank by just 0.1 per cent, improving from a 0.5 per cent decline in the first quarter. The economy of Cyprus shrank 1.7 per cent, the worst showing of any EU member.
Mr Solveen said external demand had helped the so-called periphery of the eurozone - Portugal, Spain, Italy and Ireland - that were among the hardest hit by the sovereign debt crisis and the hangover from the boom years.