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“It is not the end of the crisis, but the beginning of the end of the crisis,” German Economy Minister Philipp Rösler told The Wall Street Journal regarding the euro zone’s lingering debt problems, giving a reality check to those who may be inclined to celebrate the recent calm in the markets.
He warned that for Germany, Europe’s largest economy, to return to solid growth, the euro zone must be stabilized. Despite the marked deterioration of the euro-zone economy in the final months of last year — the region slipped further than expected into recession in last three months of 2012 — he “expressed guarded optimism that European policy makers are getting the upper hand in the euro zone’s three-year-old sovereign-debt crisis,” according to the Journal.
But the German economy did shrink in the fourth quarter, by 0.6 percent, as lasting uncertainty about the currency bloc’s economy caused companies to limit their investments. Rösler contends that this trend will begin to reverse in the next few months, and by the end of the year, investment could begin to rise again if the crisis continues to ease. “We are expecting strong growth during the course of the year and growth of 1.6% in 2014,” he commented. ”The precondition for that is that the euro zone continues to stabilize.”
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