Germany leading euro into RECESSION – Merkel’s decline to CRIPPLE Italy and France
ECONOMIC uncertainty and political instability in France and Italy should be a far greater worry for eurozone finance chiefs than Germany sparking fears of a Eurozone recession, according to a leading economist.
By LEVI WINCHESTER
Express.co.uk
Mon, Jan 14, 2019
Europe’s largest economy has rattled financial analysts over recent weeks after it was announced the German economy had contracted in the third quarter. Economists fear the nation could be on the cusp of a major downturn after a string of weak industrial and manufacturing figures pointied to a slowdown in growth. The eurozone has also been hit by a raft of downbeat predictions for the economy, with latest numbers showing industrial output fell in November by more than expected. Economists are suggesting the series of weak national data raises concerns about the bloc’s growth in the final quarter of the year.
Eurostat estimated industrial production in the 19-country currency bloc plunged by 1.7 percent in November.
But despite the recent gloomy forecast for Germany, economist and chairman of Capital Economics Roger Bootle said the eurozone should be focusing its attention on France and Italy.
Mr Bootle said a significant economic slowdown would see unemployment rise in France and weaken the leadership of French President Emmanuel Macron.
Mr Macron is to launch a national debate on January 15 to try to mollify the yellow vest protesters, whose unrest has shaken his administration.
The debate, to be held on the internet and in town halls, will focus on four themes – taxes, green energy, institutional reform and citizenship.
In a comment piece for The Daily Telegraph, he said: “If the downturn turned into a full-blown recession, what then?
“We wouldn’t need to worry a great deal about Germany, which has done well and enjoys a low rate of unemployment.
“France would be a worry.”
Mr Bootle warned of political unrest should the popularity of Mr Macron fall any further, with this proving a “worry” for the eurozone.
He said: “If his popularity falls any further then businesses and financial markets may come to worry that the next presidential election in 2022 could produce a win for Marine Le Pen.
“Above all, she is a French nationalist and would want to reassert French sovereignty in relation to the EU. That would really put the cat among the pigeons.”
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