What's bad for Germany could be good for Europe

Livewire News

Livewire

What's bad for Germany could be good for Europe. In May, growth in Germany was predicted to be just 2% next year. This figure has been halved, to a little more than 1% - the same rate forecasters now expect for the euro area as a whole. Inflation forecasts for the euro area are now expected to rise by 0.5% this year and 0.8% next year. The ECB's inflation target of below, but close to, 2% is slipping further out of sight. This combination of slow growth and persistently low inflation is dangerously self-reinforcing. It keeps debt-to-GDP ratios high across the whole euro area. Depressing confidence and putting additional downward pressure on demand. It's one thing for Germany to lecture Greece, Italy, Portugal and Spain on the need for more responsible economic policies from a position of economic strength. Germany has the fiscal capacity to spur demand with tax cuts and higher public spending. The best policy for the whole euro area has long been obvious, and it's now increasingly clear that it makes sense for Germany itself: (VIEW LINK)


Livewire News
Livewire News
Livewire

Livewire News brings you a wide range of financial insights with a focus on Global Macro, Fixed Income, Currencies and Commodities.

Expertise

No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.