Euro woe: With Ukraine unstable, low Eurozone growth is troubling

 

Share

Not so long ago, the economies of Greece, Spain, Portugal and Ireland were the cause of so much worry about the health of the eurozone. Suddenly, it’s the “big three” of Germany, France and Italy that are causing the hearts of financial market-watchers to beat a little faster. The single currency area recorded zero growth in the three months to June, thanks to poor performances from the triumvirate. German GDP fell by 0.2 per cent, Italy’s was down by the same amount, while the French economy simply stagnated. Ironically, some of those countries on the fringe, notably Spain and Portugal, enjoyed something of a bounce back.

But their recovery is insignificant when put alongside the woes of the three central players. Between them, Germany, France and Italy account for two-thirds of eurozone GDP. Each has its own problems. Italy is ground down by appalling bureaucracy. The alarm is that Italian debt stands at €2.1trn (£1.7trn). Its debt to GDP ratio is an eye-watering 136 per cent. France is going nowhere. The economy is in the doldrums and the government seems at a loss how to give it the kick-start it so urgently needs. Germany was hit by problems with its exports. Normally, that could be dismissed as a temporary blip and the eurozone could look forward to another German powerhouse performance in the next quarter. But crucially, these figures were registered before the Ukraine stand-off entered a new phase, before Russian sanctions were introduced. Since then, business confidence in Germany, a huge trading partner with Russia, has crashed, and the tensions with Moscow show no sign of abating. Far from it – they could get worse.

The consequences for the eurozone of a worsening row with Russia do not bear thinking about – the underlying weakness of the single currency area is all too obvious. What’s required is some action from the European Central Bank. Just as pump-priming via quantitative easing appears to have worked for the UK economy, so too must the ECB consider something similar for the eurozone. It has to find a way of sparking growth. To do nothing, against the backdrop of Ukraine, is not an option.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

Ashdown Group: Senior Marketing Executive- City of London, Old Street

£40000 - £43000 per annum + benefits: Ashdown Group: Senior Marketing Executiv...

Ashdown Group: Marketing Manager

£40000 - £43000 per annum + benefits: Ashdown Group: An international organisa...

Ashdown Group: Internal Recruiter -Rugby, Warwickshire

£25000 - £30000 per annum: Ashdown Group: Internal Recruiter -Rugby, Warwicksh...

Day In a Page

Read Next
 

Errors & Omissions: pours or pores, pulverised, ‘in preference for’ and lists

Guy Keleny
Ed Miliband created a crisis of confidence about himself within Labour when he forgot to mention the deficit in his party conference speech  

The political parties aren't all the same – which means 2015 will be a 'big-choice' election

Andrew Grice
Transfer guide: From Arsenal to West Ham - what does your club need in the January transfer window?

Who does your club need in the transfer window?

Most Premier League sides are after a striker, but here's a full run down of the ins and outs that could happen over the next month
The Last Word: From aliens at FA to yak’s milk in the Tour, here’s to 2015

Michael Calvin's Last Word

From aliens at FA to yak’s milk in the Tour, here’s to 2015
Aren’t you glad you didn’t say that? The worst wince-and-look-away quotes of the year

Aren’t you glad you didn’t say that?

The worst wince-and-look-away quotes of the year
Hollande's vanity project is on a high-speed track to the middle of nowhere

Vanity project on a high-speed track to nowhere

France’s TGV network has become mired in controversy
Sports Quiz of the Year

Sports Quiz of the Year

So, how closely were you paying attention during 2014?
Alexander Armstrong on insulting Mary Berry, his love of 'Bargain Hunt', and life as a llama farmer

Alexander Armstrong on insulting Mary Berry and his love of 'Bargain Hunt'

From Armstrong and Miller to Pointless
Sanchez helps Gunners hold on after Giroud's moment of madness

Sanchez helps Gunners hold on

Olivier Giroud's moment of madness nearly costs them
A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall