A flood of negative data worries the European chancelleries. Germany, the great continental economic engine, drastically cut its growth forecast for 2019 from 1.8 to 1% on Wednesday, the Brexit is still in its labyrinth and the prospect of an exit to the braves is gaining ground, the social tensions in France the yellow vests have damaged consumption, and although the US-China trade war lives a truce, the uncertainty remains. In this context of turbulence, Italy, the third largest economy in the eurozone, has confirmed its role as a sick person in Europe by returning its GDP to negative territory.
The Italian government assumed that the country would go into recession, but the reverse has been even worse than expected. The analysts expected a fall of the GDP of a tenth, and finally it has retreated 0.2% of the GDP. In an unusual gesture, the Prime Minister, Giuseppe Conte, it anticipated the publication of the figures this Wednesday and attributed the disastrous march of the economy to the mismanagement of past administrations and the complex world situation. Conte dodged the blame alleging that the Budgets prepared by the anti-system coalition formed by the Five Star Movement and the extreme right-wing League have just been approved a month ago.
The Italian stagnation comes from afar, and is accompanied by a mountain of debt (132% of GDP) only lower in the EU than in Greece. The future does not appear clear either. The Executive estimates a growth for 2019 of 1%, but the Bank of Italy and the IMF reduce that advance to a pyrrhic 0.6%.
The 20th anniversary of the eurozone is presented for few celebrations. The economy of the Nineteen accumulate with this 23 quarters of expansion and unemployment in the EU is below 8% for the first time in a decade, but as warned by ECB President Mario Draghi, at that time the economy has barely grown just over 10%.
Pending the breakdown of the final growth data by country, France (0.3%) and Spain (0.7%) are above average. "The good news is that the preliminary data from Spain and France point to a recovery of exports higher than expected, but the European economy continues to face many risks, especially from the foreign sector, "says Angel Talavera, Oxford Economics.