Official statistics show that Germany and France, Europe's two biggest economies, have emerged from recession.
Both countries reported unexpected growth in the second quarter of the year in a further sign that a recovery is beginning to take shape.
The news comes one day after the Federal Reserve said the recession-hit US economy was stabilising.
Official statistics showed that Germany and France both achieved positive growth of 0.3% in the second quarter of the year.
Germany had not seen positive growth since the first quarter of 2008 and analysts had forecast a 0.2% drop.
The figures from France were equally unexpected as the national statistics office INSEE had forecast a 0.6% drop and the Bank of France a 0.4% contraction for the quarter.
'After four quarters of negative growth, France is finally coming out of the red,' French Finance Minister Christine Lagarde said on RTL radio.
France had also been in recession for the last 18 months.
Recession is widely understood to be a run of two quarters or more of contracting output in a row.
Growth factors
Germany's Federal Statistics Office said today that the preliminary quarter-on-quarter rise was led by increases in private and public consumption, construction and net trade, as a slump in imports outpaced a decline in exports.
Europe's largest economy had been in its sharpest recession since the Second World War, with GDP declining for four consecutive quarters.
France's Finance Minister said government trade-in schemes for old cars and falling prices, particularly among big retailers, were helping consumers although she said there was no danger of deflation setting in.
She also said that solid exports were helping growth and had contributed 0.9% to the figure. She noted that French car exporters had been helped by Germany's car trade-in incentives.
Ms Lagarde said strong public sector investment, fuelled by government stimulus measures to counter the global economic crisis, was bolstering growth. But she noted that investment by private companies was still weak.
