LONDON - with better forecasts of economic growth in Germany and a surprise rebound in Greece, contributed to the 17-nation euro zone begin the new year with a bang, with the region of growth twice faster than the United States despite constant fears about the debt.
Of the euro area economy expanded by a quarterly rate of 0.8 per cent in the first three months of the year, according to Eurostat, the EU statistical office Friday.
It was more that double the growth of 0.3% posted in the previous period of three months, prior to the expectations of analysts for an increase of 0.6 per cent and twice the US growth.
"The euro area is therefore considerably outperforming all other large developed economies at the moment," said Chris Williamson, Chief Economist at Markit.
The figures have cemented expectations that the European Central Bank will be followed by an increase in the interest rate for April - the first in nearly three years - with another, possibly in July, despite the problems of indebtedness of some countries.
In terms of year on year, the economy of the euro area increased by 2.5%, at approximately that many observers believe should be its long-term average.
Olli Rehn, European Commissioner for economic and Monetary Affairs, said that the EU will surpass the levels of pre-financial crisis growth next year.
It is much earlier than planned in 2008, when the economy sank into its deepest and longest recession after the collapse of the US investment bank Lehman Brothers has put the financial system to its knees.
"The main message in our forecast is that the economic recovery in Europe is strong and continues, despite recent external turbulence and tension on the sovereign debt market," said Rehn.
The new Commission forecasts are for the euro zone to grow by 1.6% this year and the enlarged EU of 27-nation, which includes members other than the euro as Britain, 1.8%.
Unsurprisingly, given its size, the Germany was the main reason that the euro area has grown so fast in the first quarter. Growth of 1.5% means that most large economy of the European Union has made all the production lost during the recession. He was taken by a healthy balance of exports and household spending.
"The Germany is the engine of growth among the industrial countries - and not only in Europe,"stated the Minister of the German economy Philipp Roesler."."
Economy of the France, second largest in the eurozone, expanded by a solid 1 percent on higher consumer spending and business investment. The economies of the North as the Netherlands have increased strongly, while the Italy and the Spain late.
Perhaps more surprising, given the quagmire of debt that is, Greece posted solid growth of 0.8%, its first economic growth since the fourth quarter of 2009. However, the increase is not likely that a sign of a sustained pick-up as the contraction of the previous quarter has doubled a colossal 2.8%.
Manos Chatzidakis, head of investment strategy at Pegasus Securities, said that the Greek figures were disappointing because of the revision.
"The economy still has a considerable way to go before recovery," said Chatzidakis. "We remain in a very unfavourable situation."
Portugal, another beneficiary of rescue, returned in a recession. Its quarterly decline of 0.7% following the 0.6% decline recorded in the previous three month period - a recession is classified as two consecutive negative growth quarters. The Portugal is the third country of the eurozone to agree to a rescue, following the Greece and the Ireland.
Problems of these countries are likely to be protracted as they struggle to reduce their mountain of debts. It is to these problems, including those in the Greece, which continue to dominate sentiment towards the euro.
The Executive Board of the European Union, on Friday raised its forecast of debt for the three of them.
This will probably spices discussions between the Governments of the euro on the question of whether if the Greece will need a second rescue plan. It will also fuel calls from many economists who say that the Greece have to restructure its debts - to delay or reduce its bond payments. Ministers of the euro zone will begin to discuss how to help the Greece at a meeting Monday.
Although growth has contributed to the euro for some time, the broader concerns of the debt crisis has prompted a modest retreat.
By times of London late afternoon, the euro declined 0.1% to $1.4222, after having traded as high as $1.4338 earlier. Last week, it was near 18-month highs above $1.49 before that disorders of the Greece most recent debt began to dominate sentiment.
Despite of underway in the eurozone debt crisis, the European Central Bank should continue to increase the rate of interest over the next few months, especially as the economic recovery is becoming rooted.
"Performance solid growth of the economies of power plants in the EU is the European Central Bank, in a more difficult situation uncomfortable" said Tim Ohlenburg, Senior Economist at the Centre for Economic and Business Research.
"High interest rates would make sense for large countries, the Centre of the euro in which unemployment is falling and exit is back, but it would further undermine the weaker economies with high debt levels and fragile banking sector".added Ohlenburg.
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Gabriele Steinhauser Brussels, Geir Moulson Berlin and Nicholas Paphitis in Athens contributed to this story.
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