Economy & FinanceEurope

Eurozone: Focus economic policy on growth


The economy of the Eurozone did not grow in the second quarter of 2014, the statistics office Eurostat announced on Thursday

Economic output dropped by 0.2 percent in Germany and Italy and stagnated in France. Berlin’s austerity policy hasn’t done anyone any good, commentators write, and call for a more expansive monetary policy from the European Central Bank.


ECB needs even more expansive policy

The ECB will have no option but to buy government bonds on a large scale to forestall another economic slump in the Eurozone, the liberal business paper Financial Times (United Kingdom) believes:

“The ECB will almost certainly at some point be forced into quantitative easing to rescue the real economy – just as it was eventually forced to rescue peripheral sovereign debt. The problem remains resistance among some governments, notably Germany, and the Bundesbank. Mr Draghi has floated the idea of buying asset-backed securities. The faster that conversation reaches the conclusion of full-blown QE the better.”


Focus economic policy on growth

The stagnation in the Eurozone shows how necessary a radical change in economic policy is, the conservative daily La Vanguardia (Spain) warns:

“If we analyse the situation it’s easy to see that the European economy can’t grow if those who manage the euro under Germany’s dictate are clipping its wings. … It’s clear that after the summer break and once the new executive takes office, the EU will have to review its current economic policy and focus seriously on growth, employment and progress. The classic measures implemented by the orthodox Germans haven’t helped the Eurozone or even Germany itself. Its shrinking GDP is proof that in the medium and long term the German economy can’t grow if the rest of the Eurozone countries, who are its main customers, don’t grow either.”


Hectic bailout measures harm EU economies

The fact that the economies of certain European countries shrank in the second quarter is above all due to mistakes at the EU level, the liberal-conservative daily Neue Zürcher Zeitung (Switzerland) believes:

“The weak state of many European economies has to do with the fact that the eagerness of many European politicians to introduce bailout and redistribution mechanisms has hindered the recovery of markets and national finances. In this light the negative figures from Germany can help to raise awareness of the tasks that still lie ahead in the EU. Characterised by expansive policy on the part of the ECB and debt-driven national economies, today’s Eurozone is marked by a false sense of stability that in many places is all too willingly mistaken for real stability and an adequate basis for continuing with traditional European integration.”


Nothing but empty promises from France

France’s economy has failed to grow for the second quarter in a row. All the fault of the government’s failed policies, the left-liberal daily Le Monde (France) believes:

“Every three months the economic indicators contradict the government’s robust forecasts. The motor has broken down and, unlike what could have been hoped for just a year ago, the French economy is not being ‘pulled along’ by the dynamism of its European partners. … The same causes – lower production and fewer jobs – bring about the same effects – growth is flagging as a result of austerity. These negative figures come as a hard blow for François Hollande and the government of Manuel Valls and undermine their credibility. The responsibility pact was supposed to make the French economy more dynamic and allow it to join in on the European recovery. Neither of these goals has been achieved.”


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