THE eurozone economy has enjoyed its best year in a decade, in the first clear evidence that it has broken out of the prolonged debt crisis that raised fears about the survival of the euro currency itself.
In its first estimate for the fourth quarter, Eurostat, the European Union's statistics agency, said the eurozone had expanded by 0.6 per cent in the September-December period from the three months before.
That healthy level of growth means that for the whole of 2017, the eurozone economy expanded by 2.5 per cent, its best performance since 2007, when it grew 3 per cent.
In the decade since then, the eurozone has had to grapple with one crisis after another, starting with the financial crash of 2008 that prompted the deepest worldwide recession since the Second World War. That exposed the weak underbelly of the eurozone – the state of the public finances in a number of member economies.
Four countries – Greece, Ireland, Portugal and Cyprus – had to be bailed out by their partners in the eurozone and the International Monetary Fund, and in return they made deep budget cuts to get their public finances into shape, hitting their economies hard.
It is only recently that fears of a eurozone break-up have eased. Greece, notably, is set to emerge from its bailout era this summer, eight years after it faced potential bankruptcy.
With fears of a break-up of the eurozone largely evaporated, confidence across the bloc has risen. That is evident in the fact that growth is not just reliant on the big economies of Germany and France.
Stronger growth is being recorded in those countries that were at the forefront of the crisis and that is helping to bring down unemployment, potentially reinforcing the recovery.
Following the defeat of several populist political movements in elections in 2017, such as in France and the Netherlands, there are fewer fears about the prospect of anti-euro politicians taking the helm. Meanwhile, the recovery has been boosted by the European Central Bank's massive stimulus programme and its move to slash interest rates.
However, the growth boon is not just about improvements in the eurozone. The global economy, in particular trade, is on the up, which is supporting the eurozone's exporters.
That combination of positive factors is widely expected to hold in 2018 and growth is anticipated to come in around 2017's level.
Two potential headwinds are the recent appreciation in the value of the euro, particularly against the dollar, which makes eurozone exports less competitive in international markets, and the prospect of less monetary stimulus from the ECB.
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here