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July 31,2013
LONDON — There are signs that Europe’s economy may finally be starting to recover from years of recession and slow growth that have left millions unemployed and hampered the global economy. But experts say it’s too early to plan celebrations.
Industrial production in Europe is starting to come back. That means more jobs and more money that workers and their families can spend. Over time, that means more economic growth.
The latest statistics make experts like Jonathan Buck, Europe Editor of the financial publication Barron’s, believe the continent’s economy is on the mend. “In the last couple of years, we’ve seen it, effectively, turn a corner of sorts," he noted. "I think that we will see Europe emerging from recession later this year.”
That would be good news for Europe’s protesting workers, like for railway employees in Romania, who have been marching against planned layoffs and wage cuts.
“We came here, first of all, to defend our working places, to have better salaries, better working conditions," said Vasile, a Romanian railway worker.
But at the London consulting firm Capital Economics, Senior European Economist Jennifer McKeown said a real recovery is not likely very soon. "Even the more optimistic surveys are pointing to very modest rates of expansion, and after such a long and deep recession, that’s really not much of a recovery,” she said.
A year ago, some experts warned the euro zone could break up. But now Latvia is preparing to join the zone, and officials showed off the design for its new coins.
Still, McKeown said the threat to the euro continues, as voter patience with bailouts and austerity runs out. “I think that that all points to a risk of an exit, or at least a lot more tension within the euro zone in the quarters to come,” she said.
“The bailouts have helped countries to stabilize their debt situations and their budgetary problems. And the breakup of the euro seems to have been taken off table,” said Jonathan Buck who works for Financial Times.
While that is not a universal view, it's noteworthy that any experts hold it. But even Buck’s relatively optimistic viewpoint has limits. “We still may see a few shocks that could test the sustainability of what we’re seeing in Europe at the moment,” he stated.
So, even if Europe is in the early stages of recovery, it will be a long, slow and uncertain one, particularly for the region’s most troubled economies.
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