The Eurozone grew just 0.2% last quarter. Its largest economy, Germany, went negative, while new data predicts France will grow just 0.3% in the third quarter, which is the same negligible growth it had for the first two quarters of 2019.
“Austerity” is a word which is no longer heard as often as it used to be, even though it remains the economic policy command from Brussels. The Eurozone has endured a “Lost Decade” of even less growth than either of Japan’s two Lost Decades. And yet, the same policy prescription holds sway despite the lack of results and the many years it has been given a chance to work.
French President Emmanuel Macron has begun his long-awaited austerity rollback to the pension system, which he says is necessary due to France’s high public debt.
However, what caused public debt to balloon in France and across the Eurozone was funding bailouts for corporate banks, and then the money-printing bonanza which is Quantitative Easing.
Analysts say the European Central Bank fears to make any policy change even though their policies haven’t worked, as a global recession is expected soon. This week they are expected to announce multiple measures of economic stimulus in order to calm stock and bond markets.
Is Europe's Industrial Powerhouse Heading Towards a Recession?
By Ramin Mazaheri
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