JP Morgan| Recently, one of the main questions in investors´ minds was whether the weakness which has extended throughout the global manufacturing sector would damage Europe´s domestic economy, which until now has remained relatively solid faced with negative external factors over the last year.
The inflation data for March will be the key publication of this week. With the market discounting a 0.1% drop in the main figure, Ebury analysts believe that a 1% inflation would be enough to drive a modest rebound in the euro from its current position.
S&P has reduced its estimate of GDP for the euro area by 5 tenths in 2019 from +1.6% in November to +1.1%. In 2020 it forecasts a growth of +1.4% (vs. +1.6% previous), +1.4% also in 2021 (vs +1.5% previous) and +1.3% in 2022.
J.P. Marín-Arrese | Even if income losses could shore up to some extent the immediate impact of a recessive bout, running huge deficits would exert a destabilising and uneven effect on public finances. The lack of risk-sharing schemes weighs down on Euro-zone resilience when subject to severe strain as record shows.
The Organisation for Economic Cooperation and Development (OECD) has again downgraded global economic growth for 2019 to 3.3%. However, the most striking point was the strong downgrade of Eurozone GDP growth, which it now forecasts at only 1% when only a few months ago it was expecting 1.8%. Germany and Italy are the countries that emerge worse from this severe downgrade of growth.
BS Markets | The growth of the Eurozone economy continued in August, although “at a slower rhythm tan in the last 18 months”. Moreover, companies´expectations of future growth have fallen to the lowest level in almost two years, according to the data of the PMI study by consultant Markit.
Obsessed by minor issues, Europe forgets the important thing. If it really wants to avoid a repetition of the banking crisis, it should apply itself to guaranteeing high and sustainable growth, as well as introducing solid cushions of own funds for hard times and a more efficient preventive supervision. However, reducing the problems of the Eurozone to no more than the health of the banks is an exercise in short sightedness.
BoAML think that national fiscal buffers will be the only device to face the next cyclical downturn. In fact, with a fairly mild cyclical shock, the Stability and Growth Pact would be severely stressed. The solution can be a growth-stabilising euro area budget. If not, monetary policy may have limited further space.
Francisco Vidal (Intermoney) | The next few days will be interesting as EU leaders confront the future of the European project, although they will also have to deal with the latest developments on Brexit, and no doubt dedicate time to US commercial belligerence.
In a speech given on 11 June 2018 in the IFo Institute (Munich), former Greek Finance Minister Yanis Varoufakis noted the urgent need for a fiscal reform, which France and Germany see in a very different way, in order to save the Eurozone.