The Euro Area has not managed to rebound from the prolonged slowdown since 2018 and Q1 2019 data revealed almost no acceleration of GDP growth compared to the previous quarter. The manufacturing sector continues to contract due to weak external demand and global uncertainties.
Weak inflation has been plaguing the eurozone growth prospects since the beginning of the year. This has prompted the European Central Bank (ECB) to cut interest rates and keep the refinancing rate at 0%. A new round of ECB’s bond-buying programme is also being considered.
After a period of intense negotiations, the nominations for the chief European positions were announced, with Ursula von der Leyen, Christine Lagarde and Charles Michel being nominated for head of the European Commission, ECB president and president of the European Council, respectively. The staunchly pro-EU candidates will give the bloc some much needed political stability against the backdrop of rising Euroscepticism and internal squabbles.
Despite the slowdown, some key fundamentals remain strong. Unemployment rate is reaching pre-crisis levels and fixed investment has kept a robust performance.