Great news. The Eurozone is back in growth.
The fact that Europe is no longer getting worse is an important milestone.
But things are dismal overall, and this chart from Philippe Waechter, the Chief Economist at Natixis Asset Management, tells a tragic story.
First, after the initial financial crisis, European growth fell violently off trend (the red line).
But then Eur compounded the financial crisis with a sovereign debt crisis, and so after returning to growth, the economy fell off even its second, sub-trend glide path.
So since the crisis, Euro has fallen beneath two trend line: The original one, and then a new diminished one.
The amount of catching up the Euro area needs to do is massive.
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