For an economy whose prospects have been so roundly written off so many times, the euro zone is doing surprisingly well.

Second-quarter growth came in at 0.3%, reversing the first quarter's downturn, and beating economists' expectations. Even more startlingly, two euro-zone countries - Germany and Portugal - may end up being the fastest-growing economies in the G-7 and the Organization for Economic Cooperation and Development, respectively, in the second quarter, Berenberg Bank notes. As ever with Europe, there are plenty of caveats. But don't underestimate the importance of the direction of travel.

Yes, Germany is leading the recovery, growing 0.7% in the second quarter, helped by a bounce from a cold winter that held back activity early this year. Yes, the surprisingly strong growth of 0.5% in France may fade, given that it was driven by consumption and inventories. Yes, there are special factors that explain Portugal's stunning quarterly growth of 1.1%, the first positive result since 2010, including the timing of Easter and a big boost to fuel exports. And yes, Italy, Spain and the Netherlands are still in recession.

But for the euro zone, the bigger picture matters. Growth in Germany was driven by domestic demand; exports are helping shield southern Europe from deeper domestic downturns. Even Greece's economy may be close to turning the corner. Southern Europe has begun to close the gap with the north in terms of competitiveness. More structural reforms are needed but significant progress has been achieved.

With Markit's composite euro-zone purchasing managers index finally rising back above 50 in July, the third quarter has got off to a good start. Financial tensions continue to ease: Spanish and Italian bond yields are falling again. And while the European Central Bank may have to back up its guidance that rates will remain low for an 'extended period,' low inflation gives that pledge credibility.