© Copyright Acquisition International 2024 - All Rights Reserved.

Article Image - Eurozone’s GDP Boost Should Ease Negotiations
Posted 16th February 2015

Eurozone’s GDP Boost Should Ease Negotiations

GDP in the Eurozone grew by 0.3% quarter-on-quarter during Q4 2014, faster than expected.

Mouse Scroll AnimationScroll to keep reading

Let us help promote your business to a wider following.

Eurozone’s GDP Boost Should Ease Negotiations
Image

Eurozone’s GDP Boost Should Ease Negotiations

According to data released today by Eurostat, GDP in the Eurozone grew by 0.3% quarter-on-quarter during Q4 2014, faster than expected. This means annual growth over 2014 was 0.9%.

A number of countries helped the Eurozone to beat forecasts this quarter. German output increased by 0.7% quarter-on-quarter over Q4, powered by exports and consumer spending. While exports have long been the engine of German growth, consumer spending had been out of line with other members. Spain and Portugal have returned to expansion and posted increases of 0.7% and 0.5% respectively. Italy and France continue to dampen the currency union’s overall reading with zero and 0.1% growth respectively, while Greece has shown again the mercurial nature of its recovery by contracting 0.2% over Q4.

It may be tempting to wonder why these small changes in output matter. Athens has only a fortnight until its next IMF payment is due and mere days to agree the conditions for a further line of credit to avoid outright default. Politics seem to have taken over, and the focus has moved away from GDP to wrangling over debts and austerity. But it matters because at root this crisis is about growth. The Eurozone has seen virtually no expansion in output since the recession, and some predict a “new normal” state of low growth where an ageing population and high debts cause virtual stagnation for decades as in Japan. Under such conditions, the currency union would remain under severe strain, with impoverished electorates unable to agree on the fiscal transfers that are needed to maintain balance in a group of economies with variance in competitiveness.

The recovery in growth should aid negotiations for Monday’s crucial showdown, where the sides need to find a compromise. It is easier to be generous when the pie is expanding. Perhaps Germany’s sizeable export boost will remind Merkel what Germany gains from the euro and why it has expended so much effort already in supporting weaker members. Certainly she would be unable to sell a more lenient deal to her own voters if their own standards of living were falling, no matter how parlous the situation further South. In addition, both parties appear to be making concessions since the disappointing Eurogroup meeting of Eurozone finance ministers on Wednesday, when negotiations broke down without even finding common starting ground.

Today’s figures give grounds for cautious optimism. They show that even amid great uncertainty and the deflation that prevailed in Q4, the Eurozone achieved growth and its largest underwriter also boosted output. The low oil price has helped bolster spending and the European Central Bank may even receive some credit for its various preliminary efforts in late 2014 before pulling the quantitative easing lever. Much more is needed to help Europe out of its stagnation, especially on fiscal policy where there remains untapped resource for stimulating demand. Tentative signs of growth make the potential for compromise stronger, though Europe is still some way from a mutually acceptable solution. The next Eurogroup meeting on Monday remains decisive.

Categories: Finance


You Might Also Like
Read Full PostRead - Eye Icon
How Artificial Intelligence Can Help Deliver an Improved Customer Experience in Your Contact Centre
Innovation
09/07/2020How Artificial Intelligence Can Help Deliver an Improved Customer Experience in Your Contact Centre

Some of the most innovative AI tools such as chatbots can revolutionise your contact centre, but where do you start? Stay focused, educate agents and make technology the strategic enabler.

Read Full PostRead - Eye Icon
Securing Repeatable Project Success
Leadership
11/01/2021Securing Repeatable Project Success

Managing a project proactively and effectively is very often the key to ensuring a successful outcome. So much emphasis can be placed on results, that the process of managing the project throughout can sometimes be lost. However, one firm has taken it upon its

Read Full PostRead - Eye Icon
Top places to find skilled specialists for your startup: React developers for hire
News
18/04/2023Top places to find skilled specialists for your startup: React developers for hire

You’ve just decided to hire React developer talent for your cutting-edge project. You’re brimming with excitement, but there’s a problem: where do you find these elusive experts to make your vision a reality? Fret not, fearless leader, for we

Read Full PostRead - Eye Icon
AI-Based Resource Management
Innovation
21/06/2019AI-Based Resource Management

Can Do has been one of the leading providers of solutions for resource and project management for almost an impressive 20 years.

Read Full PostRead - Eye Icon
Scapa’s Acquisition of First Water
Finance
08/04/2015Scapa’s Acquisition of First Water

Scapa's Acquisition of First Water

Read Full PostRead - Eye Icon
Reduce Employee Turnover With These 5 Strategies
Strategy
01/03/2023Reduce Employee Turnover With These 5 Strategies

Managing a business is more than overseeing your operations and keeping your company's finances afloat. One of the equally important tasks you must prioritize is caring for your organization's vital asset- your employees.

Read Full PostRead - Eye Icon
Equistone Partners acquire Averys
M&A
08/04/2015Equistone Partners acquire Averys

Equistone Partners acquire Averys

Read Full PostRead - Eye Icon
M&A Appetite on the up, but Completed Deals Slide, says KPMG
Finance
08/09/2015M&A Appetite on the up, but Completed Deals Slide, says KPMG

Despite the recent turbulence in the markets, analysts expect the world’s largest businesses to show an increasing appetite for M&A transactions.

Read Full PostRead - Eye Icon
Peer-to-Peer Lending: A Comprehensive Overview of How It Works, Pros & Cons
News
31/07/2023Peer-to-Peer Lending: A Comprehensive Overview of How It Works, Pros & Cons

Peer-to-Peer lending is a form of lending in which borrowers and lenders connect with one another without the involvement of traditional lending institutions. 



Our Trusted Brands

Acquisition International is a flagship brand of AI Global Media. AI Global Media is a B2B enterprise and are committed to creating engaging content allowing businesses to market their services to a larger global audience. We have 14 unique brands, each of which serves a specific industry or region. Each brand covers the latest news in its sector and publishes a digital magazine and newsletter which is read by a global audience.

Arrow