According to the publications by two of the Eurozone’s biggest powers, France and Germany, they suggest that they have just turned the corner and have come out of the recession. Both economies gross domestic product rose by 0.3% in the second quarter of 2009. The main contributors came in the form of increasing exports and consumer spending coupled by their government’s stimulus packages. In addition, other economies in Europe such as Italy reported a 0.5% contraction in the second quarter which is a significant improvement from Q1. However, the overall picture suggests that the Eurozone is still in recession as we saw economic activity drop by 0.1% in Q2 across the area.

The signs certainly look positive for Europe, but what’s the situation for the UK? Well, the UK does seem to be lagging behind our European counterparts. According to Peter Mandelson, this can be attributed to the fact that, “Different economies will show different patterns of behaviour”. It is likely that economies such as France and Germany were less impacted by the global recession, as they are less reliant on the financial sector for their economic growth. However, in some ways their gain can be considered a positive sign for us in the United Kingdom. Typically, around 55% of the UK’s trade is done with Europe and therefore any uplift they are seeing will hopefully drift its way across the British Isles.

The government in the UK expects to see Britain out of the recession by early next year, however, they suggest that it will take the economy a lot longer to get back on track. However, in the short term the news has impacted the markets with the French and German stock exchanges rising more than 1%, even the FTSE 100 is up. This will have a positive impact and hopefully be the start of an upward trend for investments and badly hit pension funds.