Spain and Britain continue to struggle but Germany, France and Italy, which account for more than two-thirds of aggregate eurozone output, made the third quarter the turning-point for the common currency area, which spans 16 countries.

Germany and France, which shook off recession in the second quarter, posted quarterly growth rates of 0.7 and 0.3 per cent respectively in the three months to the end of September, even though France did only half as well as economists had expected.

Italian gross domestic product turned positive with a rise of 0.6 per cent quarter over quarter, following five quarters of shrinkage.

That brought the eurozone as a whole above the water line, even though French GDP, propelled almost solely by exports as traditionally sturdy domestic consumption wilted, was just half of the 0.6 per cent rise forecasters had anticipated.

The European Union’s statistics office, Eurostat, said the aggregate GDP of both the eurozone and 27-country EU of which it is part, turned positive, with quarterly growth of 0.4 per cent and 0.2 per cent respectively.

Germany does not give detailed figures until later in the month but economists noted that exports seemed to be the main driver of recovery there as in France, along with the fact that companies are no longer running down warehouse stocks, or inventories, so frantically.

“In sum the eurozone has officially turned the corner and that is cause for relief, not celebration,” said Martin van Vliet, an economist at ING bank who stressed that investment and consumer spending needed to pick up before the recovery could be considered sustainable.

“The eurozone’s worst post-war recession may be officially over, but unfortunately for many people and businesses it will continue to feel like a recession for some time to come.”

The positive third-quarter figure for eurozone GDP followed a drop of 0.2 in the second quarter and ended five consecutive quarters of contraction.

Uphill Acceleration

Eurozone GDP is forecast by the European Commission to have shrunk a record 4 per cent in 2009, with most of that plunge in the first half of the year, before signs emerged of a stabilisation in global trade and destocking by companies.

The Commission on Nov. 3 marginally raised its forecast for GDP in 2010 to 0.7 per cent and predicted an acceleration to 1.5 per cent in 2011, with much the same forecast for the 27-country EU, but said there could be another “soft patch” in the first half of 2010.

The challenge policymakers face now is deciding when to end the fiscal and monetary stimulus credited with averting a steeper slump and limiting the cumulative loss of GDP to five percentage points in the EU since GDP started falling in the second quarter of 2008.

That, the European Commission says, is three times as big as average output losses in three previous recessions since the 1970s.

Howard Archer, economist at Global Insight, also forecast a temporary loss of growth momentum during 2010.

The US economy emerged from recession in the third quarter with annualised GDP growth of 3.5 per cent versus the preceding three-month period, a figure that equates to about 0.8 per cent for the sakes of comparison with European figures.

International Monetary Fund chief Dominique Strauss-Kahn, visiting Singapore, said he did not believe there would be a so-called double-dip recession where the current upturn proves short-lived and morphs rapidly into another downturn.

While the largest mainland economies of Europe are growing again, Britain, Ireland, Spain and others have yet to do so even if there is evidence that the worst of the crisis has passed.

Spain on Thursday reported a third-quarter GDP drop of 0.3 per cent, versus a second quarter where the contraction was a far heftier 1.1 per cent.

Beyond the euro currency area, Britain reported its sixth straight quarter of shrinkage in the third-quarter, when GDP fell 0.4 per cent versus the previous one.

On Europe’s eastern flank, accustomed to far racier growth rates before the downturn, Czech GDP rose 0.8 per cent in the third quarter and Hungarian GDP fell 1.8 per cent in the same period, both compared to the second quarter.