The coronavirus is another big unknown. China is a major customer for German cars and other European products. A slowdown in China would spill over to the eurozone. Europeans are also nervous that President Trump could follow through on threats to put punitive tariffs on cars manufactured there.
Output in Italy, Europe’s most troubled big economy, unexpectedly shrank 0.3 percent in the fourth quarter compared to the third. For the full year, Italian growth was zero, signaling more of the stagnation that has plagued the country for more than a decade.
Brexit has already hurt trade between Britain and Europe. Germany missed out on about 16.2 billion euros, or $18 billion, in exports to Britain because of Brexit, according to the Ifo Institute for Economic Research in Munich, which measured how much more Germany would have sold to Britain if trade had remained as high as it was in 2015, before the Brexit referendum.
Some economists expressed optimism that the fourth quarter of 2019 was a low point and European growth will begin to recover. Only a few months ago it looked like Britain was headed for a disorderly exit from the European Union. That danger, at least, seems to be past.
France, where the economy unexpectedly shrank 0.1 percent in the fourth quarter, could bounce back now that the strikes that paralyzed transportation have largely ended.
Unemployment in the eurozone, at 7.4 percent in December, is at its lowest since before the financial crisis began in 2008, according to figures released Thursday. When people have jobs, they spend more money and contribute to growth.
“Our hope is that the fourth quarter marks the bottom,” Ms. Colthorpe of Oxford Economics said. “We are little bit positive about 2020. But with uncertainties about Brexit and so forth it’s not going to be a massive rebound.”
Article source: https://www.nytimes.com/2020/01/31/business/economy/european-union-eurozone-economy.html?emc=rss&partner=rss
Speak Your Mind
You must be logged in to post a comment.