The economic narrative in the Eurozone has shifted — once-troubled economies like Italy, Greece, and Portugal are now outpacing some of the bloc’s largest economies, thanks to looser regulations and increased investment in tourism. Meanwhile, mainstays such as Germany have been hampered by an aging workforce, reliance on Russian energy, and regulatory burdens.
- A decade after grappling with a severe debt crisis, Greece is projected to achieve a near 3% growth rate this year (compared to the EU’s 0.8%) and has finally regained its investment-grade credit rating.
- Italy has experienced one of the strongest post-pandemic recoveries in the Eurozone, largely attributed to tax incentives that have boosted construction output by 40% since 2019.
Signs of life: These resilient economies still struggle with high unemployment rates, though countries like Spain benefit from an influx of foreign workers (a bit like the US). These nations have also been less affected by the reduced supply of Russian gas since the war in Ukraine began, and the manufacturing downturn that has been hampering Germany. Plus, they’ve been helped by cooling inflation, with the EU’s core rate dropping to 2.7% in yesterday’s reading. All eyes are now on the European Central Bank, which is still on track to cut rates in June.
