EU at ‘crunch point’ over future of the Eurozone says expert
We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info
The criticism came after an influential business climate index showed that confidence in German business expectations fell sharply in August. The business climate index by the Ifo Institute in Munich slumped to 99.4 in August, from 100.8 in the previous month. It was the second consecutive month in which the rating had declined after a series of steady improvements since the start of 2021.
Senior AfD politician Gunnar Beck, a German MEP, told Express.co.uk: “Germany’s long running lockdown has hurt people and businesses. By following the EU’s flawed model, Angela Merkel has disrupted the supply chains and gravely hurt the economy.
“In the three major crises the EU has faced – be it Covid, the Euro or immigration the EU has failed every time.
“It appears the EU no longer has problems. It is the problem.”
The Ifo Institute index was dragged down in particular by business expectations for the next six months.
Many firms have expressed fears over supply chain disruptions and the potential resurgence of COVID-190 infections in the Eurozone’s largest economy.
Clemens Fuest, president of the Ifo Institute, said: “Supply bottlenecks for intermediate products in manufacturing and worries about rising infection numbers are putting a strain on the economy.”
He added because of the threat of future lockdowns to curb the spread of coronavirus infections “concerns are growing in the hospitality and tourism sectors”.
Carsten Brzeski, global head of macro at ING, said the data, when analysed in line with Germany’s softened Zew sentiment index and similar surveys, suggests a “loss of momentum for Germany in the second half of the year”.
He added: “If hard data follows the levelling-off of soft indicators, the economy’s return to pre-crisis levels will be delayed.”
Andrew Kenningham, chief Europe economist at Capital Economics, was less downbeat.
He said the data suggested the German economy “is still buoyant” and predicted “very strong” growth in gross domestic product in the third quarter of this year, of around three percent from the previous three months.
The German economy grew by 1.6 percent in the second quarter.
MUST READ: Brexit LIVE: Boris poised for huge breakthrough with Norway deal
In comparison, the UK’s economy has recorded growth of 4.8 percent in the second quarter.
While output remained below pre-pandemic levels, Britain’s economy surged forward thanks to the easing of coronavirus restrictions and the progress of the country’s vaccination programme.
Last month the International Monetary Fund backed Britain’s recovery as it delivered a major growth upgrade.
The IMF’s World Economic Outlook predicted the UK economy would advance by seven percent this year.
VDL power grab exposed as Commission plans taxpayers’ register [INSIGHT]
‘The British are right!’ Nexit calls reach boiling point over EU army [ANALYSIS]
EU on brink as ‘prospect of hostile France’ reality [REVEALED]
Merkel departure would have ‘major impact’ on EU says Butikofer
That is the fastest pace since the Second World War and is only likely to be equalled by the US.
Gita Gopinath, the IMF’s chief economist, said: “There was a period where there were restrictions in place, they were being slowly relaxed, but there was greater adaptability to those restrictions and we saw economic activity coming back somewhat stronger than we expected.
“And UK vaccines are going very strongly, so that helps with the recovery, it will be a big positive.”
The UK’s growth is expected to outstrip the EU’s Eurozone, which is forecast to grow 4.6 percent this year, according to the IMF.
Source: Read Full Article