The Brussels Times
As we slowly leave the cold season behind us, a wintry chill has suddenly descended on the eurozone economy. Looming storm clouds threaten further disruption. And just as the authorities struggle to get Brussels moving again when a snowstorm hits, eurozone policymakers are ill-equipped to stimulate the economy if it stalls. Indeed, there is a big danger they would actually make matters worse.
The warning signals are already flashing orange. After a surprisingly strong 2017, the economy weakened substantially last year. When growth almost ground to a halt in the third quarter – and major economies such as Germany and Italy actually shrank – many thought it was just a blip. But the news since then has been ominous. Exports have flagged. Industrial production is falling. Business confidence is down. The blip now looks like a downturn – and if businesses cut back their investment and consumers their spending, it could readily become a recession.
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