World Economy

Eurozone Economy Firming

Eurozone Economy FirmingEurozone Economy Firming

The recovery across the 19-country eurozone economy appears to be firming despite fears over a Greek debt default and exit from the euro.

 Financial information company Markit says its purchasing managers index for the eurozone–a broad gauge of business sentiment–rose to a 49-month high of 54.1 in June from the previous month’s 53.6. Anything above 50 indicates expansion, AP reported.

Markit also says Tuesday that the upturn took the second-quarter average to its highest level for four years and points to quarterly economic growth of 0.4%. Markit chief economist Chris Williamson says the eurozone is “weathering the Greek storm relatively well.”

Following a summit of eurozone leaders Monday, hopes are high that a deal with Greece will emerge in the coming days to prevent a default.

A European Commission survey of consumer confidence released Monday similarly indicated that a standoff between the Greek government and its international creditors over the terms of its bailout hadn’t impaired growth in the wider eurozone.

Greece’s creditors suggested for the first time that a deal to avert the country’s bankruptcy was in sight after an 11th-hour proposal submitted by Athens on Monday made a significant concession on pension cuts.

“At present at least, the eurozone economy is weathering the Greek storm relatively well,” said Chris Williamson, chief economist at Markit, the data firm that surveyed purchasing managers.

The June pickup suggests the eurozone economy has avoided a slowdown during the quarter, but its failure to significantly build on the currency area’s modest momentum in the three months following the launch of the European Central Bank’s new program of quantitative easing highlights deep-lying impediments to economic growth.