Not many years have passed since the economies of southern Europe were reeling from the financial crisis, and the northern countries – led by Germany – were demanding stifling budgets despite the huge social costs.
More than a decade later, the situation in Europe appears to have reversed. The “steam engine” of Europe, Germany, is stagnating, while the economies of the South seem to be thriving.
At least this appears to be the case from Eurostat data, he said The eurozone economy remained stagnant in the last quarter of 2023Which extends an unpleasant path for a union facing serious challenges such as wars, inflation, and weak export markets.
More specifically, according to Eurostat, GDP remained unchanged in the fourth quarter of 2023 compared to the previous quarter and was slightly higher. Over last year (0.1%).
as mentioned POLITICO, The weak performance of the Eurozone is mainly due to GermanyWhich confirmed a contraction in the GDP by 0.3% in the last three months of 2023.
Furthermore it, France did not record growth For the second quarter in a row.
Meanwhile, French GDP remained stagnant, although it managed to avoid recession, simply because imports declined more quickly than exports.
Weakness in the two largest economies in the eurozone Partially offset by stronger than expected numbers from both Spain and Italy.
Italy, which was expected to remain stagnant, Recorded growth of 0.2%While Spain Expanded by 0.6% – Three times the forecast of 0.2%.
These numbers mean that the eurozone has just avoided two consecutive quarters of negative growth, the classic definition of a recession. However, the finer points of economic jargon are likely to matter less than the grim reality that the eurozone has had no meaningful growth since mid-2022, Politico points out.
“The cheerful chatter about two quarters of negative growth helps no one,” said Paul Donovan, global chief economist at UBS Wealth Management. “The difference between 0.1% growth and zero growth is meaningless in terms of living standards or what the policy response should be.”
The “smaller” economies of the euro area
Among the smallest economies in the Eurozone, Portugal grew by 0.8% The last quarter, Austria expanded by 0.2%While its economy Ireland shrank by 0.7% -Its fourth consecutive quarterly decline in 2023-.
Starting from the fourth quarter of 2022 and the last quarter of 2023 The Eurozone is growing by only 0.1%While the European Union grew by 0.2%.
As mentioned guardianHowever, a stagnant eurozone economy will increase pressure on the European Central Bank, which sets interest rates for monetary union countries, to start lowering borrowing costs.
“A technical recession in the eurozone has only just been averted,” said Bert Cullen, chief economist at ING Bank. “However, the eurozone economy is now in a broad-based recession from late 2022, and has lost significant ground to the US from Where GDP has been in recent years, after its upward phase – after the pandemic – the economy has now entered a phase of long-term weakness.
Since Russia's invasion of Ukraine nearly two years ago, The euro zone is struggling to deal with rising energy and food prices. The European Central Bank raised interest rates last year to the highest level since the euro was introduced in 1999.
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