Germany drags EU along as it powers to economic revival

The figures appeared to show that the eurozone was not so badly damaged by the sovereign debt crisis that began in Greece and forced a multi-billion bailout of its economy.

But observers warned that this rate of growth is unlikely to continue into the third quarter — particularly since the euro has recovered from it low point, making it harder for export-fuelled growth.

The German statistics office could barely conceal its excitement, pointing out that today's was the highest quarterly increase in its gross domestic product since the two Germanies were reunified 20 years ago.

"The recovery of the German economy, which lost momentum at the turn of 2009-10, is really back on track," proclaimed Destatis, the official compiler of statistics.

But elsewhere economists were a little more sanguine. Carsten Brzeski at ING Bank, said: "Today's numbers are an impressive reminder that the German economy is currently playing in a league of its own. However, watch out not to get carried away by blind cheer. As much as the first-quarter GDP numbers underestimated the real strength of the economy, are second quarter numbers now overestimating it? German growth will return to more ordinary growth numbers."

Europe's largest economy saw growth driven by a surge in exports on the back of a weak euro and a relatively strong revival in construction work.

While Germany's growth was double that of the UK's 1.1% in the second quarter most of the other major European economies showed more modest expansion. France's GDP rose by 0.6%, Italy's by 0.4% and Spain and Portugal's by just 0.2%. Only Greece continues to contract shrinking by 1.5% in the second quarter.

French economy minister Christine Lagarde said growth was three times better than in the first quarter, driven by higher consumer spending and corporate investment. She said: These numbers are very encouraging. I hope we are entering a virtuous circle where private-sector investment leads to job creation."

Jennifer McKeown of Capital Economics warned that the "recovery still looks worryingly lopsided" because of Germany's well above-average growth.

She said: "The eurozone recovery looks set to falter before long, and the expansion in the meantime will do little to erode spare capacity that built up during the recession. The peripheral economies will continue to suffer from fiscal tightening and look set to remain in, or return to, recession."