Euro zone grows after six quarters of contraction

The giant Euro symbol stands outside the headquarters of the European Central Bank (ECB) in Frankfurt am Main, Germany.

The 17 nations that use the European single currency are growing after a year and a half of contraction -- the longest period of economic downturn in Europe in the postwar period. The combined GDP for the euro zone countries was .3 percent higher than the first quarter of the year. While that growth rate is hardly impressive, it's better than economists expected.

"The European economy is turning a corner," says David Kelly, chief global strategist at JPMorgan Funds. "But it's not like a Ferrari whizzing around the corner. It's more like a beat up old Volvo tumbling around the corner."

Germany, Europe's largest economy, deserves most of the credit for the economic turnaround after six straight quarters of contraction. But France also played a large part, as did economically distressed Portugal. Portugal’s economy grew by 1.1 percent, despite being in the third year of an international bailout.

"They will take that here in Germany as signs that the very bitter medicine is starting to work," says the BBC's Steve Evans from Berlin. "Now, one quarter does not a trend make, and there may well be special factors in the case of Portugal. All the signs are German consumers -- notoriously careful with their money -- are starting to be a bit freer with their money, and that, for example, has an impact on Portugal, because Germans travel to Portugal for their summer holidays."

"We're not out of the woods yet," says Evans. "But the broad picture is positive, and positive is better than negative."

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