Spain is accelerating, Germany is slowing down, and Greece is in reverse. Gross Domestic Product (GDP) in the entire euro area grew by 0.4% in the first quarter, one tenth more than in the last quarter of 2014, according to Eurostat’s first estimate. However, this figure from the EU’s statistics office conceals a disparity in the performance of the different economies in the region. Low oil prices, the depreciation of the euro against the dollar, and the debt purchase programme, coupled with the low interest rates spurred by the European Central Bank’s (ECB) monetary policy have been the main factor which has benefitted the Eurozone’s economy. But the ECB has warned that the recovery will not be sustainable unless governments work harder with reforms.
Paul has worked for AmericaFotografía Paul Mielgo British and Spanish TV, radio and printed media, as an editor and television anchor for the Bloomberg Spanish channel in London and Madrid for twelve years, specialising in international affairs and financial markets. He currently serves as an editor for Radio Intereconomía (Spain) and has also worked for international organisations like OSCE and the EU as an electoral observer. He has an MA degree in journalism from El País/Universidad Autónoma in Madrid.
The European Commission has upped its growth forecasts for the Eurozone and the entire EU after noting the positive effects of the European Central Bank (ECB) debt purchase programme; cheaper oil prices, and the depreciation of the euro. However, this economic improvement will not be uniform across all the member states. Gross Domestic Product (GDP) for the 19 euro members will be up this year by 1.5%, two tenths higher than estimated in February by the EU executive. For the 28 countries in the European Union, the Commission also revised forecasts upwards by one decimal point to 1.8%
After five years of research, the European Commission has today accused Google of abusing its dominant position by promoting its products in Internet searches, where it control 90% of the market share in Europe. In parallel, the Commission has formally opened an antitrust investigation against Google’s Android mobile operating system, including its applications and services. This opens up a new front against Google, which could affect its aspirations of gaining ground in the mobile market.
In the European Parliament the head of the Single Supervisory Mechanism (SSM) for the Eurozone banks has committed herself to restraining financial institutions and closely monitoring the models they use to calculate risks. Danièle Nouy has given assurances that “we will be a demanding supervisor, however at all times we shall strive to make our action fair and impartial.” The SMM just published its first report that has overseen more than 6,000 banks in the region since last November.
The Eurogroup needed just half an hour to deal with the package of measures presented by Greece in Brussels, pressurizing the Athens government to negotiate the technical issues seriously and in detail with experts from the European Commission, the European Central Bank (ECB) and the International Monetary Fund; the so-called “men in black” of the former Troika. Meanwhile, the Greek authorities do not rule out fresh elections or a referendum on the euro if negotiations prove fruitless.
The European Central Bank (ECB) is to start buying up sovereign bonds from 9 March. Its president, Mario Draghi, believes that the programme of unprecedented monetary stimulus in the Eurozone will succeed in stemming the threat of deflation in the region. Next week will see an enormous machinery set in motion for the purchase of public debt on a mass scale from the 19 countries in the monetary union. Known as quantitative easing (QE), this has now been renamed by the ECB as the Public Sector Purchase Programme (PSPP) and will consist of bond purchases up to €60bn per month.
The liberal, pro-European and pro-NATO Estonian Reform Party led by Prime Minister Taavi Roivas and his partners in government, the Social Democrats, won the 1 March 2015 parliamentary elections, although they will need to seek the support of a third political force to stay in power. The Centre Party, led by Edgar Savisaar, has garnered more votes among Russian speakers. The elections were marked by security concerns and fears of a repeat of the Ukraine conflict in the Baltic region.
Greece continues to be financed with the help of the European Union. Eurozone Ministers of Economy and Finance have approved the new package of economic measures presented to Brussels by Athens. This then paves the way to extend Greece’s bail-out. The spokesman for the European Commission, Margaritis Schinas, said that the proposals are “sufficiently complete” and are a “good start”. The same expression was used by Mario Draghi in a statement, however the ECB president added several ‘buts’. According to Draghi, what counts is the current memorandum.
Mario Draghi has fulfilled his promise and put into action the words “whatever it takes” – which he declared at the height of the debt crisis in July 2012 – to save the euro. After the first ECB Governing Council meeting of the year, its president announced the implementation of the much-anticipated Quantitative Easing (QE), a statement that has not only fulfilled but exceeded the markets’ expectations. The Italian banker has led the ECB into unknown territory with a massive sovereign bond-buying plan that will be added to the existing private sector asset purchase program, amounting to a total of €1.14 trillion. The goal is to quell the threat of deflation, and to reactivate economic growth, which remains stagnant in the euro area.
Hitherto, the European Central Bank (ECB) always held its meetings on monetary policy on the first Thursday of every month, followed by a press conference with its president, Mario Draghi. Starting this year, this decision-making frequency will be reduced, and the communications will be more transparent. The Governing Council’s first meeting of 2015 – which could result in the largest stimulus for the euro area of all time– will be held on 22 January, and not on 8 January, which was the custom. 2015 is also a year of enlargement: with Lithuania joining the euro area as its 19th member state.