2024-08-31 09:18:32
Last year the 27 EU member states had an average growth of 0.4%. “The German economy actually contracted by 0.3%, […] while France and Italy do not yet show any convincing growth dynamics,” writes the German Journalism Network (RND).
“The fact that the EU did not fall into recession in 2023 is also due to the strong economic growth of the former crisis states. In Greece last year there was economic growth of 2%, in Portugal 2.3% and in Spain 2.5% – and this year it looks like all three countries will have strong growth again. In the first quarter of 2024, for example, the Eurozone had an average growth of 0.6% according to Eurostat – in Greece, GDP increased by 2.1%.
Where is the growth coming from?
“There are many reasons why the economy of the states of the European South is growing,” RND continues. “One reason is tourism: Portugal, Spain and Greece set holidaymakers’ records last year and this year looks set to break them again.
Due to the heavy reliance on tourism, the economies of the three states experienced a significant downturn during the pandemic. That is why the strong growth now is also a result of the corona virus years. The situation is similar in the real estate sector, which suffered a serious blow during the 2010s and the euro crisis. Today the construction industry is booming and real estate prices are rising.
In addition, the NextGenerationEU recovery fund, which the Union created after the pandemic, also contributes to the development of the countries of the South. Yes, yesSouthern European states benefit from funds and low-interest loans much more than Northern states – which is especially true for Greece, which takes the most money from the treasury than any other country in proportion to its economic output.’
Is the economic miracle of the South sustainable?
“But how sustainable is the economic miracle of the South?”, asks the German network. “Despite the fact that the debt crisis forced Greece, Spain and Portugal to undertake many reforms, the three countries still have structural weaknesses.” The governor of the Bank of Greece, Yannis Stournaras, “warned that he sees in Greece a fatigue regarding the implementation of reforms, adding that there is still much to be done, primarily in the field of justice and public administration”.
Source: Deutsche Welle