Sonntag, 17.11.2019 00:59 Uhr

After the European Parliament vote European governance

Verantwortlicher Autor: Carlo Marino Rome, 27.05.2019, 09:15 Uhr
Nachricht/Bericht: +++ Politik +++ Bericht 6098x gelesen

Rome [ENA] After the European Parliament elections and the fact that Mr. Salvini won in Italy, but not in Europe, it’s important to talk again of economic estimates. Anyway a sovereignist Italy means that Italy will be more alone in Europe.The quarterly growth rate of the euro area in Q1 2019 was 0.4% (1.5% annualized), considerably higher than the low growth rates of the previous two quarters. European economic growth

estimates have been released in the course of the last two weeks. First, Eurostat announced its preliminary flash estimate for real growth for the euro area and the EU in Q1 2019, on April 30th. And then, on May 7th, the European Commission published its Spring Economic Forecast.The incoming numbers were important given that growth slowed down substantially in the second half of 2018, especially in the euro area. The European Commission forecast growth in the euro area is 1.2% in 2019 compared to a projection of 2.0% a year ago (for 2018, growth was at 1.9% vs the projected 2.3% a year ago). However, the preliminary flash estimate for the euro area was 0.4% (1.5% annualised), considerably higher than 0.1% in Q3 2018 and 0.2% in Q4 2018.

The slowdown in growth has been global, but particularly more pronounced in the euro area. A VoxEU column by the European Commission officials working on the forecast explains why: “All in all, it appears unlikely that the business or financial cycles are responsible for the slowing of growth in Europe,” the authors claim. The real cause is the slowdown in global trade growth, particularly imports of the euro area’s main trading partners, and the excessive reliance of euro-area manufacturing on external demand. Commission officials also stress the macroeconomic impact of transitory shocks on the European automotive sector that added to longer-term, more persistent challenges.Specifically, the lack of certificates for a large type of models

in accordance with the new Worldwide Harmonised Light Vehicles Test Procedure (WLTP) by September 1st – the date the regulation took effect in the EU – led to inventory accumulation and a temporary stop in production, particularly in Germany. The Commission estimates that the reduction in the output of the German automotive sector in Q3 2018 (8%) translated into a 0.6 percentage-point (pp.) loss in GDP for Germany, 0.2 pp. in Czechia, Hungary

and Slovenia and 0.1 pp. in Slovenia . What’s more, “the WLTP effects added to regulatory discussions on limitations to the use of diesel cars in cities, the ongoing ‘Dieselgate’ affair, and falling Chinese and global demand for European cars. The impact of these factors overlaps with more fundamental structural changes affecting the demand for combustion-engine cars (e.g. alternative power sources, automated driving, car sharing)”.

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