The collective growth of the economies of all of the countries that use the euro sat at 1.5% in 2015.
According to the statistics agency Eurostat, the last three months of 2015 saw them grow 0.3% faster than in the three before. The combined growth of all 28 EU member states also went up by 0.3% in the fourth quarter- this took overall GDP growth for 2015 to a rate of 1.8%.
Last year saw growth in the eurozone slow down, which has prompted many people to begin questioning whether or not more action should be taken in order to help stimulate these economies by the ECB.
An economist at ABN Amro, Nick Kounis, said:
“We continue to think that further monetary easing is required, with further policy rate cuts on the cards from March onwards,”
Eurostat revealed on Friday that the total level of industrial production had also fallen by 1% in December compared with November, this occurred for both the EU and the eurozone. The EU and the eurozone experienced year on year falls of 0.8% and 1.3% respectively.
The largest contraction in the eurozone was in Greece; the economy shrunk by 0.6% in the final quarter, which was actually better than had previously been expected. However the third quarter shrank by more than had been previously thought, changed from 0.9% to 1.4%.
Andrew Walker, an economics correspondent for the BBC, commented on the figures:
Several eurozone governments following austerity policies have faced protests on the streets and at the ballot box.
But could it have been a little easier?
That is where Germany comes in. There certainly is a view that Germany has in effect made it harder than it need have been.
How so? Germany surely is the seat of eurozone financial prudence and virtue? Well, there is a case that those features of Germany are a problem for the others.
Germany saw its economy expand by a total of 1.7% in 2015, posting a 0.3% rise in the last three months of the year. The statistical agency in Germany said that the rate of government spending was “markedly up” while the rate of household consumption was also up. This news came after unexpectedly poor production figures for December.
Thomas Gitzel, chief economist at VP Bank group, said that “slow and steady was the retrospective motto for 2015” and said that whilst fourth quarter growth was “not exhilarating” it was not a reason to be concerned.
This latest set of figures is likely to be of interest to both sides of the EU referendum campaigns. The referendum is looking likely to be held in June or July and economic performance is one of the most hotly contested points on both sides of the argument. The “In” campaign have constantly argued that the British economy benefits hugely from being a member of the European Union, while the “Out” campaign have stated that the UK could better protect its interests if it were free from the economic shackles of the EU.
George Osborne spoke about the referendum in a recent speech and rebuffed recent comments made by the RBS chief, which suggested that the uncertainty surrounding Britain ‘s membership was damaging the banking sector and businesses at large.
“I don’t think uncertainty about future EU membership is harming the UK economy, because the most recent numbers this week show we’re creating jobs and employment is at a record high and we’re getting a lot of investment. Do I think getting this relationship right for Britain, with the European Union, is important to our economic future? Yes I do, and what the Prime Minister was saying, and what we’re saying as a government, is let’s reform that relationship, let’s allow the Eurozone to pursue, if they want, that ever greater political union. Britain doesn’t want to be part of it, but within a reformed EU and with proper protections for countries like Britain that aren’t in the Euro, we can have that European Union.”
He continued to highlight the fact that the UK is not part of the eurozone and that this makes it ever more vital to find the correct relationship with the EU so that it can be exempt from ever closer political union.
“We’ve got to get this question right, we’ve got to get the reforms right, you know, our argument is reform the European Union, make sure that Britain is more comfortable inside the European Union by protecting, as I say, countries without the Euro, making sure we’re not we’re not part of ever-closer union, making sure we don’t have welfare tourism, achieve those sorts of things and make Europe itself more competitive, and then it will be actually a big boost to investment, and that’s exactly what the negotiation is all about at the moment.”
The chancellor then spoke about whether or not he felt that market analysts were correct to downgrade their forecasts for UK economic growth. He said that the UK ‘s economy was in a particularly strong position and that this had even been recognised by the International Monetary Fund in recent times. However he did say that the world economy was currently in a dangerous position and that this prevented a risk to countries that were as “open” as the United Kingdom.
“The IMF had their latest forecast this week, and they did downgrade the world economy, but they didn’t downgrade the UK, and they kept the UK forecasts where they are, and along with the United States, we’re set to be one of the fastest growing of the advanced economies, but clearly we’re a big, open trading nation, we’re probably the most open of all of the big G7 economies, and so you do look with some concern at what’s going on in global markets, and it does present something of a dangerous cocktail out there.”
David Cameron also commented on the upcoming EU referendum:
“I want to secure the future of Britain in a reformed European Union. I believe that is the best outcome for Britain and the best outcome for Europe. Now, some people ask me, ëWell, why are you holding a referendum? ‘ Let me explain why I believe this referendum is so crucial. For years Britain has been drifting away from the European Union.
The increased unpopularity of the EU in the UK has been well-documented and the Telegraph recently announced the results of its commissioned YouGov poll, which showed that the “Out” vote had reached an all-time high lead.
“The European Union has become increasingly unpopular in Britain. And added to that, the succession of politicians, after treaty after treaty after treaty has passed, have promised referendums, but never actually delivered them. And I think it ‘s absolutely essential to have full and proper democratic support for what Britain ‘s place should be in Europe and that ‘s why we ‘re holding the referendum.”
It is as of yet unknown when the referendum will take place but many observers are now beginning to think that June is the most likely date for it to be held. It is thought that the “In” campaign would favour this option as it avoids the risk of a further summer migrant crisis, which could tip the balance.