France, Germany return to growth

? Government programs to support the auto industry helped Germany and France return to economic growth in the second quarter, rebounds that stoked hopes the recession in the wider 16-country euro area may also end sooner than thought.

Europe’s two biggest economies each saw growth of 0.3 percent from the previous three-month period, surprising analysts’ expectations for equivalent declines and technically ending their worst recession in decades.

The French and German increases marked a stunning turnaround from the previous quarter, when Germany shrank by a massive 3.5 percent and France contracted by 1.3 percent.

The unexpected increases in Germany and France meant that the 16-country euro area contracted at a sharply reduced rate of 0.1 percent, much less than the 0.5 percent anticipated in the markets.

Though the euro zone drop was the fifth straight quarterly decline, it was a marked improvement on the record 2.5 percent fall recorded in the first quarter and was even better than the 0.3 percent quarterly decline recorded in the U.S., the world’s single largest economy.