Can the eurozone really be 'exiting recession'?

News reports today are heavily populated with stories marking the fact tomorrow is the one-year anniversary of the collapse of US investment bank Lehman Brothers - an act largely credited with sparking the global financial meltdown.

You'd be forgiven, then, for wanting to curl-up in a ball and forget all about the state of the world's economy; but don't be too hasty, because - according to the latest forecast from the European Commission - the eurozone, at least, is now emerging from the recession.

According to the commission, the economy appears to be at a turning point, bolstered by "unprecedented" government stimulus that has helped to boost economic activity throughout the region.

The predictions, however, come despite the fact the economy contracted by more than expected in the first half of 2009, meaning that overall forecasts have remained unchanged at -4 percent.

Meanwhile, the European Commission's bright outlook mirrors that of the European Central Bank (ECB) who earlier this month had also raised its forecast for economic growth. According to its reports, the ECB predicted the eurozone economy would contract between -4.4 percent and -3.8 percent throughout 2009; and Jean Claude Trichet, president of the ECB, noted at the time how the "eurozone economy was entering a period of stabilisation and gradual recovery."

The eurozone (officially known as the euro area) currently consists of 16 European Union member states, including Austria, Belgium, France, Germany and Greece, and leaders from all of these nations are already planning to tackle economic recovery issues at the G20 summit in Pittsburgh next week.

In the interim, Germany and France were already reported last month to have come out of recession, which has again boosted the commission's hopes for the future of the eurozone economy.

The advice now is that stimulus packages must be kept in place for at least another 12 months if we are really to ensure full economic recovery.

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