Beneath the headline-grabbing numbers showing on Thursday that the euro zone has fallen into recession, there lies a more positive and probably more important story: the growth trajectories of the currency blocs four largest economies have moved considerably closer together.
The convergence of Italy and Spain, the two economic weaklings of the quartet, with the strongman Germany, and France, which had recently been caught somewhere in the middle, eases the risks posed by the biggest design flaw of the euro zone. This is the fact that, because of the absence of a true fiscal union, it is only as strong as the weakest of its most powerful constituent parts.
The bad news of the day was that the euro zone has entered its second recession since 2009, after gross domestic product (GDP) declined by 0.1 percent from July to September, on a quarter-over-quarter basis. This marked the second straight quarter of falling output the most common definition of a recession. As a result, the euro zone economy is now 0.6 percent smaller than it was a year ago. However, this mild third-quarter decline was both less steep than forecast and even less pronounced than in the second quarter, when GDP fell by a fairly gentle 0.2 percent.