The eurozone economy has long been a source of uncertainty, in the past decade has been one of the best years, clearly prove it has got rid of long-term debt crisis, which led to the concerns of the euro currency survive.
In its first estimate for the fourth quarter, eurostat, the European Union’s statistical office, said on Tuesday that the euro zone expanded by 0.6 per cent between October and December compared with the previous three months.
Higher than healthy growth means the eurozone economy will grow by 2.5 per cent for the full year of 2017, the best performance since 2007, when growth was 3 per cent. The euro zone’s growth rate even exceeded that of the United States, rising 2.3%.
Bert Colijn, senior eurozone economist at ING, said: “economic growth has turned into a fast growth path in 2017. “Although detailed details have not yet been released, it appears that the eurozone economy continues to fire on all cylinders.”
In the decade since 2007, the eurozone has had to deal with another crisis, starting with the 2008 financial crisis and prompting the world’s worst recession since the second world war. This exposes the weakness of the eurozone – the public finances of some member states.
Four countries – Greece, Ireland, Portugal and Cyprus – needs to be signed by its partners in the eurozone and the international monetary fund to bail out, and in return, they make a decision in slashing the budget, in order to make its public finances to form, and make its economic troubles. Greece, for example, produces about a quarter of its economic output, with higher levels of unemployment and poverty.
Until recently, worries about the euro had eased. It is worth noting that Greece will be in the rescue this summer, eight years after its first potential bankruptcy.
The eurozone’s overall confidence has risen amid fears of a break-up of the eurozone. This suggests that growth is not just dependent on big economies in Germany and France. In those countries at the forefront of the crisis, stronger growth is being recorded, which could help lower unemployment and could further strengthen the recovery.
After the defeat of several populist political campaigns in 2017, after the French and Dutch elections, fears about the future of anti-euro politicians were reduced. Meanwhile, the European central bank’s massive stimulus package and its interest-rate cuts have boosted the recovery.
But the benefits of growth are not just about improving the eurozone. The global economy, particularly trade, is rising, which supports the euro zone’s exporters.
The combination of such positive factors is widely expected to continue in 2018, with growth expected to be around 2017. Two potential downsides are the recent appreciation of the euro, particularly against the dollar, which makes the euro zone’s exports less competitive on the international market and the ECB’s stimulus less.
The euro rose further against the dollar after growth, hitting a three-year high recently and rising 0.3 per cent to 1.2414.