The eurozone “is on the brink of recession”, says Szu Ping Chan in The Telegraph. Output in the single-currency area shrank by 0.1% in the three months to the end of September, the first contraction since the 2020 lockdowns. Another fall in the current quarter would meet the technical definition of a recession – two consecutive quarters of shrinking GDP.
The “good news” is that the eurozone is “set to avoid a deep contraction”, says Balazs Koranyi for Reuters. The overwhelming sense is more of stagnation than a big recession. But that is cold comfort when growth catalysts are so hard to see. Europe has been hit hard by the energy price spike that followed Russia’s invasion of Ukraine, says Paul Hannon in The Wall Street Journal.
There has also been a post-pandemic slump in international trade, dealing a particular blow to Germany’s export-oriented manufacturers. On an annualised basis, eurozone GDP fell by 0.4% in the third quarter, even as US GDP soared by 4.9% in the same period.
Try 6 free issues of MoneyWeek today
Get unparalleled financial insight, analysis and expert opinion you can profit from.
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
This year has turned out to be better in Milan and Madrid than in Frankfurt and Paris, says Bastien Bouchaud in Les Echos. Shares in Italian banking giant Unicredit have gained 84% in 2023, with Spain’s Banco Santander up by 32%.
Italian and Spanish banks have been boosted by rising interest rates and unexpectedly strong growth. Italy’s GDP has risen by 3.3% since late 2019 and Spain’s by 2.2%. By contrast, Germany has grown just 0.3% in that time. After being lectured endlessly by German politicians during the euro crisis, southern Europe is finally enjoying a degree of “revenge”.
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
Related articles
- European stocks are ignored and cheap – but possibly not for long
- Ray Dalio's shrewd bet on the collapse of European stocks
- 5 investment trusts to buy for exposure to Europe's leading companies
-
Pensioners ‘running down larger pots’ to avoid inheritance tax as rule change loomsChanges to inheritance tax (IHT) rules for unused pension pots from April 2027 could trigger an ‘exodus of large defined contribution pension pots’, as retirees spend their savings rather than leave their loved ones with an IHT bill.
-
Why do experts think emerging markets will outperform?Emerging markets were one of the top-performing themes of 2025, but they could have further to run as global investors diversify
-
UK small-cap stocks ‘are ready to run’Opinion UK small-cap stocks could be set for a multi-year bull market, with recent strong performance outstripping the large-cap indices
-
The scourge of youth unemployment in BritainYouth unemployment in Britain is the worst it’s been for more than a decade. Something dramatic seems to have changed in the labour markets. What is it?
-
In defence of GDP, the much-maligned measure of growthGDP doesn’t measure what we should care about, say critics. Is that true?
-
Reach for the stars to boost Britain's space industryopinion We can’t afford to neglect Britain's space industry. Unfortunately, the government is taking completely the wrong approach, says Matthew Lynn
-
"Botched" Brexit: should Britain rejoin the EU?Brexit did not go perfectly nor disastrously. It’s not worth continuing the fight over the issue, says Julian Jessop
-
'AI is the real deal – it will change our world in more ways than we can imagine'Interview Rob Arnott of Research Affiliates talks to Andrew Van Sickle about the AI bubble, the impact of tariffs on inflation and the outlook for gold and China
-
Tony Blair's terrible legacy sees Britain still sufferingOpinion Max King highlights ten ways in which Tony Blair's government sowed the seeds of Britain’s subsequent poor performance and many of its current problems
-
How a dovish Federal Reserve could affect youTrump’s pick for the US Federal Reserve is not so much of a yes-man as his rival, but interest rates will still come down quickly, says Cris Sholto Heaton
