Should Germany spend more to boost EU economy?

EU economy finance ministers asked Germany to increase public spending in order to support the ailing growth in the eurozone. Decision-makers and investors see a growing risk of recession looming on the horizon.

Draghi, Centeno, Le Maire and Dombrovskis urge Germany, Netherlands to invest against risk of recession. They all pointed to “countries with fiscal space” as those who should spend more to help revive growth.

Monetary policy alone cannot do the trick
Valdis Dombrovskis, Commission vice-president for the euro

EU economy

Economic growth in the 19 countries sharing the euro halved to 0.2% in the second quarter compared with the first. The euro zone’s biggest economy, Germany, is on the brink of a recession, contracting 0.1% in that period.

We stand ready to act if risks materialise and things get worse

Mario Centeno

Economy watchers, including the European Commission and the ECB, are concerned about the uncertainty and risks threatening the euro area, primarily the trade war and Brexit.

Growing global risk of recession

The probability of a recession in the eurozone as a whole is still “small” but “it has gone up”.
Mario Draghi, ECB President

Draghi cut the deposit facility rate by 10 basis points to -0.50%. ECB will also restart on 1 November the asset-buying programme at a monthly pace of €20 billion, while Mario Draghi urges Germany, Netherlands to invest against risk of recession!

ECB president Mario Draghi decides substantial monetary stimulus to ensure eurozone financial conditions and support the euro area expansion.

Based on regular economic and monetary analyses, ECB conducted a thorough assessment of the economic and inflation outlook, also taking into account the latest staff macroeconomic projections for the euro area.

Should Germany spend more to boost EU economy?
Is Eurozone ready if economy gets worse?

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