Perhaps we are finally getting beyond the big shadow cast by the Global Financial Crisis as EU growth has hit a level not seen since 2007; before the gathering storm broke. According to Eurostat, the 28-member EU bloc grew at 2.5% for the full year of 2017, the best performance that the bloc has managed since full-year growth of 2.7% back in 2007. However, for the crisis to be truly behind us, the ECB would have had to ended its quantitative easing measures and restored monetary policy, and interest rates, towards normal levels rather than the accommodative stance they currently have. It would also require that the assets purchased under QE are disposed of, of course.
Eurostat stated that Q4 2017 saw the EU grow at 0.6% relative to Q3 – a level of growth matched by the Eurozone and the national growth of Germany and France. The Spanish economy produced Q4 growth of 0.7%. The 19-member Eurozone bloc saw full year growth of 2.5% which was also its best performance sine 2007 when it expanded at 3%.
Unemployment in the Eurozone is still above its best performance level of 7.3% (November 2007). It currently stands at 8.7% which is the best performance since January 2009 (average unemployment stands at 9.76% (1995 – 2017) and hit a peak of 12.1% in February 2013). Across the Eurozone 14.1 million people are unemployed, but, understandably, unemployment rates are heterogeneously distributed.
The EU and Eurozone are both benefitting from a wider spread recovery in the global economy which is boosting exports to the rest of the world. Within the EU itself, analysts believe that near record employment, low inflation and rising wages will continue to bolster consumer spending. On the pessimistic side of the balance, higher energy costs (oil) and a strengthening Euro could limit growth going forward. Political factors in the UK (Brexit) and Italy (general election) may also lead to economic turbulence, but growth is expected to come in at 2.2% this year.