Sound bites: Eurozone breaks its recession shackles in Q2

These are better than expected second quarter GDP numbers from the Eurozone, but it’s nothing for the ECB to celebrate. After six quarters of unrelenting recession misery, the Eurozone has finally broken back into positive growth. It is going to be a very long, hard haul back into sustainable, strong growth again. It is a tale of two very different economies. Germany is doing all the hard work in the vanguard of strong recovery as its 0.7% Q2 GDP expansion showed. On the other side of the equation, the troubled Eurozone economies are still mired down in the mud of deep recession risk. That risk will persist while heavy austerity policies continue pose a severe constraint on economic demand. While Germany continues to enjoy the fruits of export-led recovery boosting industrial activity and consumer demand, the Eurozone stragglers will continue to act as a millstone on growth for a long time to come. The Eurozone could be bouncing along close to the bottom of recession for quite a few more quarters yet. These numbers do not let the ECB off the hook for extended low rates. While the ECB hawks may be straining on the leash for higher rates soon, the ECB’s pro-stimulus work is far from over. Given the parlous state of the troubled Eurozone economies, the support of record low rates may be needed until well into 2015.