With optimism building that the United States is already recovering smartly from another horrible start to the year, focus will shift this week to reports that may show the eurozone is finally shaking off half a decade of torpor.
The 19-member currency union has been a millstone around the global economy’s neck ever since the financial crisis spawned a sovereign debt crisis particular to Europe, Reuters reported.
China’s economy is no longer driving growth and other emerging markets like Brazil are grappling with disappointing performance in the run-up to what most expect will be the first US interest rate hike in nearly a decade later this year.
So it is all the more crucial for more than just its citizens suffering from years of high unemployment and feeble or no growth that Europe is able to pick up some of the slack.
Eurogroup finance ministers will meet on Monday to discuss once more Greece’s sclerotic progress in implementing economic reforms in exchange for bailout funds as it gets dangerously close to running out of cash.
But policymakers have already played down hopes of major progress early next week, which leaves the spotlight on the first read of how quickly the eurozone and its component economies performed at the start of the year.
Better Performance
For the first time in many years, it seems clear that the eurozone performed not only better, but far better than the US, which almost certainly suffered a mild economic contraction in January-March.
Eurozone growth is forecast at 0.5 percent, according to a Reuters poll of economists, which would even put it ahead of Britain, which consistently has been leading the biggest economies in Europe, not only in growth but employment.
Given that the European Central Bank only just began in March a 60 billion euro-a-month bond purchase program of mainly sovereign debt, such growth data certainly would raise even louder cries that perhaps stimulus is not even required.
Germany, Europe’s largest economy and the one that was most opposed to ECB bond purchases, is forecast to have grown 0.5 percent. France, which has been the laggard among the big economies, is expected to grow 0.4 percent. Even Italy is expected to chalk up 0.2 percent growth.
The Bank of England also will announce its interest rate policy this week and publish its latest Inflation Report, just days after Prime Minister David Cameron swept back to power in national elections with a narrow majority that took political pundits and much of the electorate by surprise.
