In 2013 the Eurozone finally got back on the road to recovery with some tepid growth. For 2014 the big question is: are there enough economic bright spots on the bloc’s horizon to chase the crisis storm clouds away? Many countries are still struggling with austerity reforms, high debt, chronic unemployment and a credit crunch.
Having returned from the edge of the abyss the Euro’s fate now seems secure and the single currency area even expands in January to include its 18th country Latvia. The Eurozone economy is also expected to continue growing in 2014, though at a very slow pace. So is the bloc’s crisis finally over?
"The reality is we’re far from a solid recovery yet. The problems will persist in a number of countries, we still have problems in the financial sector, we have the unemployment problem so overall there’s still a lack of growth impulses. Where’s the growth going to come from?" Fabian Zuleeg, Chief Executive of European Policy Centre said.
To make matters worse public debt remains sky high in many member states, especially Italy, which has only just wiggled out of its longest recession since the end of the Second World War.
“But the two most troubling questions being asked here in Brussels are is France’s recent credit downgrade a warning of trouble ahead for the Eurozone’s second largest economy and can number one Germany continue propping up the rest of the bloc?”
Then there’s the banking union, which will be rolled out in 2014, aimed at restoring faith in Europe’s finance sector.
"This is the beginning of the end of bank bail-outs. Banks not taxpayers will carry the cost for their own mistakes." Jose Manuel Barroso, President of European Commission said.
The real aim is to get banks lending again to households and businesses, but the banking union deal hammered out by leaders in December appears complicated and lacks real firepower. Another major concern is unemployment.
"If we face a situation where for example in Spain and Greece unemployment stays close to 25 percent of the active population then there is a real danger that in the coming years some politicians might propose to leave the Euro so I think the stability so I think the stability of the Euro really depends on how fast unemployment can be brought down in those peripheral countries." Peter Vanden Houte, Chief Eurozone Economist said.
So for the Eurozone and the EU as a whole 2014 is expected to be a year of growth and slow recovery, but with the only big change so far being in confidence and not with the bloc’s still shaky foundations.
Source: CCTV
