In the absence of generous mutual support, there was an aura of last-ditch desperation when, in March 2015, the European Central Bank announced an ambitious programme of purchasing government debt.Just over two years later, the situation looks much more positive.
The latest International Monetary Fund forecast projects 1.7 per cent growth for the eurozone as a whole in 2017, and 1.6 per cent growth in 2018 – a remarkable improvement from a few years ago, when the region struggled to break 1 per cent.
By the next morning, senior ECB officials were quoted as saying that Draghi’s remarks had been overinterpreted – and the euro fell.The real question is what comes next, and this was the theme of the conference: what should we expect in terms of Europe’s medium-term growth potential?
The precise explanation remains elusive, but the prevailing view is that while the advent of new information technology had some definite positive impact on productivity in the 1990s, the gains have not proved sufficiently long-lived or widespread.In addition, the precise pattern of technological change has put pressure on the middle class everywhere – by reducing the demand for workers who have only a secondary-school education.
Spain’s economy is greatly improved, experiencing 2.6 per cent growth, but unemployment remains stubbornly – and disturbingly – high, at around 18 per cent.Italy remains the big question, with the IMF forecasting GDP growth of 0.8 per cent this year and next.