Is the European economy overheating or already slowing? The question may seem curious, as these two diametrically opposed diagnoses could not normally coexist. But the pandemic is causing such economic upsets that the most contradictory signals coexist. Enough to make the work of the European Central Bank, whose board of governors meets on Thursday, September 9, particularly acrobatic. The Frankfurt institute, which currently buys about 80 billion euros in debt per month on the financial markets to support activity, will it begin to reduce its intervention, perhaps to 70 billion euros per month. month ? Or is it too early to remove the infusion?
On the tails, the rebound in growth is obvious. All you have to do is look around: restaurants across the euro zone have reopened, tourists have often stayed in their respective countries but have been there this summer, employees are returning to their offices this coming back to school… Au second quarter, euro area growth was 2.2%. That is an increase of more than 14% compared to the second quarter of 2020, at the worst of the pandemic. The third quarter should continue on the same trend. For the euro zone, whose growth has dragged on since the great financial crisis of 2008, these are statistics that seem to come from another time.
On the front side, it is only a catch-up. At the end of the second quarter, the gross domestic product of the euro area remained 2.5 points below its level at the end of 2019, before the pandemic. Employment has not returned to its pre-pandemic level, with 2 million fewer people in the labor market (out of a total of 159 million currently). The economy is in the process of healing, but far from being entirely healed.
In addition, the summer brought the first worrying signals. “The rate of growth is slowing down”, notes Silvia Ardagna, economist at Barclays. “We are slowing down”, abounds Véronique Riches-Flores, who has her own economic analysis firm, RF Research.
On Tuesday, September 7, the ZEW monthly index, which is made up of the opinions of three hundred financial sector experts, registered a sudden drop, indicating less optimism than in previous months. The PMI indices, which are composed of the opinions of purchasing managers of companies, also signal that order books continue to grow, but less rapidly than in the spring.
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