- Jean-Claude Trichet, the former head of the European Central Bank
Germany, Europe's largest economy, has been a locomotive for the whole 17-nation bloc during the last years. Moreover, it helped to pull the region from its longest-ever recession in the second quarter. Meanwhile, during the start of the third term as German Chancellor, Angela Merkel stressed out Germany will be able to develop at a sustainable pace only in case the Eurozone is strong.
The current outlook for the Eurozone is poor, as the European Commission predicts only a 1.1% growth, while unemployment is projected to remain above 12%. There are almost 30% of population unemployed in Greece, while Spain remains weak as well. However, a pickup in confidence in Germany and some other countries is pointing at tentative sings of improvement. If the same divergence between nations persists, it can threaten to the whole union.
The latest global financial crisis showed how weak is the region and that a stronger cooperation on fiscal and financial policies is needed to avert the similar disaster in the future. Yet German voters resist and are reluctant to make more sacrifices to help the struggling Eurozone's peripheral countries. Merkel is now forced to explain to Germans how their own interest are inextricable for their continent's. In case European authorities want the bloc to prosper in the future, they should ensure that all of its members are advancing together.
© Dukascopy Bank SA