wiiw Forecast Reports

Eurozone reform: Lack of progress leaves bloc ill-prepared for next downturn


Philipp Heimberger

in: Strong Growth Amid Increased Negative Risks
wiiw Forecast Report No. Autumn 2018, November 2018 , pp. 8-9

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It is very possible that a recession will hit the Eurozone within the next three years. If a downturn were to start, the bloc could be in big trouble. The ECB would have little room to cut further to support the economy, bond markets could sell off prompting a liquidity crisis, national governments have little room for manoeuvre in fiscal policy, and a sufficient counter-cyclical response at the EU level looks highly unlikely.


Reference to wiiw databases: wiiw Annual Database, wiiw Monthly Database