Latest news with #eurozone
Qatar Tribune
6 hours ago
- Business
- Qatar Tribune
Eurozone growth falters as Germany shrinks, tariff headwinds mount
Agencies Europe's economy barely grew in the second quarter of the year, official data showed on Wednesday, as the rush to ship goods before new U.S. tariffs eased and output in Germany, the region's largest economy, unexpectedly declined. Gross domestic product (GDP) grew an anemic 0.1% compared to the previous quarter in the 20 countries that use the euro currency, the EU statistics agency Eurostat reported. And prospects are mediocre for the coming months, given the 15% tariff, or import tax, imposed on European goods in the U.S. under the EU-U.S. trade deal announced Sunday. The higher tariff will burden European exports with higher costs to either be passed on to U.S. consumers or swallowed in the form of lower profits. The eurozone growth still held up better than feared amid expectations for an unchanged reading in the second quarter, suggesting that businesses are adapting to trade uncertainty, potentially reducing the need for more European Central Bank (ECB) interest rate cuts to stimulate the bloc. Compared to the second quarter a year earlier, the bloc's economy expanded by 1.4%, ahead of expectations for 1.2%. The economy sagged after a stronger-than-expected 0.6% growth in the first quarter, a figure inflated by companies trying to move product ahead of U.S. President Donald Trump's additional tariff onslaught that was announced April 2, two days after the first quarter ended. When examined together, however, the first two quarters suggest resilience, supported by the most recent PMI reading, which showed that business activity accelerated faster than forecast, supported by a solid improvement in services and the continued recovery in manufacturing. Europe's economic powerhouse, Germany, unexpectedly shrank by 0.1% from the previous quarter. Italy's economy also contracted by 0.1% in the same period. Growth of 0.3% in France was boosted by a rise in auto and aircraft inventories, while domestic demand was otherwise stagnant. That left Spain as the only strong performer among the four largest eurozone economies at 0.7%. France's Economy Minister Eric Lombard said the figures for France demonstrated the country's companies were, however, proving resilient to U.S. tariff hikes. 'With the 15% U.S. universal tariff likely to subtract around 0.2% from the region's GDP, growth is likely to remain weak in the rest of this year,' said Franziska Palmas, senior Europe economist at Capital Economics. The 27-country EU economy expanded by 0.2% over the April-June period from the previous quarter, after registering 0.5% growth in the first three months of 2025. Germany's economy remains roughly the same size as it was before the pandemic six years ago, as its export-dominated business sector struggles with multiple issues, including stronger competition from China, a lack of skilled workers, higher energy prices, lagging infrastructure investment, and burdensome regulation and bureaucracy. Palmas said that Germany 'is likely to be hit harder than other major economies by tariffs and continue to struggle this year' before increased government spending from the new government under Chancellor Friedrich Merz, aimed at boosting defense and making up the infrastructure gap, starts to boost the economy in 2026. Economists also argue that a sharp increase in budget spending from next year could be a boost to growth that will offset much of the tariffs' impact. This economic resilience is a key factor why financial investors think the ECB is close to done easing borrowing costs after halving its key rate to 2% in the past 13 months. Markets see just a 50% chance of another cut by December and a small chance that rates will actually start rising toward the end of 2026 as the economy gathers speed and price pressure starts rising is far from over, however. The EU has yet to sign its trade deal with the U.S., and plenty of details remain to be worked out, indicating that it could take months for businesses to gain the confidence to make investment decisions. China has also yet to strike a deal with the U.S., raising fears that Beijing will be forced to dump surplus goods on the rest of the world, depressing prices elsewhere. Such dumping could then lower eurozone inflation and force the ECB into cutting interest rates on fears that below-target inflation, its main worry in the pre-pandemic decade, is returning.
Yahoo
8 hours ago
- Business
- Yahoo
Eurozone economic growth slows to 0.1% in second quarter
The eurozone economy grew 0.1% in the second quarter of the year, coming in marginally better than the zero growth expected by economists. However, it was still a slowdown compared with the 0.6% growth seen in the first three months of 2025, as businesses had raced to get ahead of US tariffs by making more products and increasing exports to the country. Seasonally adjusted gross domestic product (GDP) also rose by 0.2% in the European Union in the second quarter of 2025, compared with the previous quarter. Year-on-year, growth eased a little, with the eurozone up 1.4% and the EU up 1.5%, both slightly below the pace previous pace. Riccardo Marcelli Fabiani, senior economist at Oxford Economics, said: "Although the slowdown is to a large extent a by-product of a misleadingly healthy Q1 number, broad-based weakness across national data indicates that the economy lacks momentum, with only a handful of countries blowing into its sails." The latest reading was better than expected due to Spain leading the way with a 0.7% expansion. This was a result of solid consumer spending, a rebound in business investment and rising exports. Read more: Gold prices steady as investors await Fed interest rate decision "Spain is in another league, showing stubbornly robust dynamism. The moderate Q2 decline in Irish GDP suggests that there is ample room for further correction," Fabiani added. There was also faster-than-expected growth in France, the second-largest economy in the EU. France significantly outperformed expectations, growing 0.3% during the period, according to the preliminary data. This was a surprise acceleration in growth from the 0.1% revised reading for first-quarter growth — and higher than the 0.1% expected by economists polled by Reuters. Portugal and Estonia also delivered solid results, expanding 0.6% and 0.5%, respectively. Meanwhile, the German economy contacted 0.1% in the second quarter of the year as companies adjusted to the impact of US president Donald Trump's tariffs. This marked the country's first contraction since mid-2024 due to weaker investment in machinery and construction. Read more: Trending tickers: Novo Nordisk, Starbucks, SoFi Technologies, BAE Systems and Taylor Wimpey Economists had expected the decline in output from the EU's largest economy and biggest exporter, with the country's federal statistics agency revising down growth in the first quarter to 0.3%, rather than the preliminary reading of 0.4%. Italy's GDP likewise shrunk 0.1% in the second quarter, reversing the 0.3% gain recorded in the first quarter and defying market expectations of a 0.2% increase. It was the country's first contraction since the second quarter of 2023. Nicholas Farr, emerging Europe economist at Capital Economics, added that the economies of Hungary and Czechia 'have held up reasonably well since the introduction of US tariffs in April', according to data published on Wednesday. Hungary's economy grew 0.4%, an improvement from a 0.1% contraction in the previous quarter. However, the Czech economy saw growth slow to 0.2% from 0.8% in the first quarter.
Kuwait Times
8 hours ago
- Business
- Kuwait Times
Eurozone economy expands but tariff impact looms
BRUSSELS: The eurozone economy unexpectedly expanded in the second quarter of 2025, official data showed Wednesday, despite international trade tensions clouding the global outlook. The EU's official data agency said the 20-country single currency area recorded growth of 0.1 percent over the same period last year — slightly better than the flat performance forecast by analysts. The eurozone economy showed 'resilience despite US trade volatility', ING Bank's Bert Colijn said. Since US President Donald Trump returned to the White House in January he has hit the EU with a series of painful tariffs, but the bloc struck a deal on Sunday to avert an escalating trade war. EU officials hope the agreement will bring certainty for companies and stave off further economic pain, though analysts warn that Europe will still take a hit to its output from the deal, which foresees a 15-percent US tariff on most exports. Eurostat data on Wednesday showed that Europe's second-largest economy, France, beat expectations to grow by 0.3 percent in the second quarter, but it was Spain that was the star performer, recording growth of 0.7 percent between April and June. Portugal also recorded 0.6 percent growth in the same quarter. Europe's economic powerhouse, Germany, unexpectedly shrank by 0.1 percent from the previous quarter. Italy's economy also contracted by 0.1 percent in the period. The eurozone growth of 0.1 percent came after the single currency area's economy grew by 0.6 percent in the first quarter. But economists warned against reading too much into the first-quarter data, saying it was due to an extreme change in Ireland's figures. The 27-country EU economy expanded by 0.2 percent over the April-June period from the previous quarter, after registering 0.5 percent growth in the first three months of 2025. The year has been full of uncertainty for Europe. Trump threatened 30-percent levies on most European goods if Brussels and Washington did not clinch a deal by August 1. Sunday's agreement lacks details — with much still being negotiated — but the two sides confirmed a majority of EU products would face the 15-percent tariff rate, including pharmaceuticals and semiconductors. Economists warned that the deal would impact the eurozone economy. 'With the 15 percent US universal tariff likely to subtract around 0.2 percent from the region's GDP, growth is likely to remain weak in the rest of this year,' said Franziska Palmas, senior Europe economist at Capital Economics. 'Looking ahead, expect swings in trade to continue to influence the economy,' said ING's Colijn, who nonetheless sounded an optimistic note for the future. 'For the short term, don't expect miracles, but at the same time, there are new signs of life starting to emerge for the eurozone economy,' he said. In the first half of the year, European companies rushed to ship more goods to avoid Trump's higher tariffs. France's Economy Minister Eric Lombard said the figures for France showed that the country's companies also proved resilient to US tariff hikes. France is now pushing for zero tariffs on alcohol including champagne and wines as well as spirits, with talks still ongoing on the issue. European officials say the deal included an agreement on mutual tariff exemptions for certain goods — but which ones exactly remained to be nailed down. – AFP
Epoch Times
9 hours ago
- Business
- Epoch Times
Euro Area Growth Stalls at 0.1 Percent as US Economy Surges 3 Percent In 2nd Quarter
The euro area's economy barely grew in the second quarter of 2025, underscoring weak momentum across the 20‑nation bloc, while the United States posted a sharp rebound over the same period. Eurostat said on July 30 that seasonally adjusted GDP in the eurozone rose by 0.1 percent from the previous quarter, while output in the wider 27‑member European Union (EU) gained 0.2 percent. Both readings marked a steep slowdown from the first quarter, when growth reached 0.6 percent and 0.5 percent, respectively.
Forbes
10 hours ago
- Politics
- Forbes
The Deflection Playbook: Using Hypocrisy To Avoid Hard Questions
There is one psychological reflex that often derails political debates, boardroom discussions, and even climate negotiations. As Carl Jung observed, 'Everything that irritates us about others can lead us to an understanding of ourselves. It's a simple quote, but it lands like a punch. On some conscious or subconscious level, we are wired to look for the very behaviors we can't stand. They're usually on our radar. And when we see them in someone else, we react with an intensity that surprises even us. You could see this dynamic at work in the eurozone debt crisis. EU leaders pressed Greece on fiscal mismanagement, and many Greek officials deflected attention to the questionable behavior of those asking the question: 'You lecture us about discipline, but you broke the same deficit rules years ago.' This isn't just European history—it's a core playbook in political economy and politics in general When faced with hard questions about their actions, leaders around the world shirk responsibility by focusing on their opponent's hypocrisy. Understanding this dynamic—and the false premise it's built on—may be one of the keys to breaking some of the world's biggest stalemates, from climate negotiations to boardroom False Premise Behind Hypocrisy as a Deflection Underneath this strategy of deflection is a crucial—and rarely examined—implication: that the opponent's hypocrisy is somehow remarkable, new, or sensational. That it's the thing we should be outraged about. But it's not. In fact, hypocrisy is the polar opposite. It's a part of the human condition. We all live with competing priorities, shifting beliefs, and a disconnect between what we say and what we do. Yet the moment someone suggests that their opponent's inconsistency as novel, the room shifts. This tactic works well for a few reasons. There is moral outrage: research reveals that when people perceive hypocrisy, they feel a mix of anger and disgust—emotions that amplify condemnation and perceived culpability. (Sean Laurent et al., Punishing Hypocrisy, 2014). There is also the radar effect: we dislike hypocrisy in ourselves, so we're primed to see it—and judge it harshly—in others Because we buy the false premise that hypocrisy is rare, we stop pressing for real answers. The deflection works, and the original question Commitments & Data Privacy Regulation Similar tactics are at play in smaller-scale international business disputes. A government that is slow to enforce environmental laws will publicly remind its critics that they themselves rely on carbon-intensive imports. An organization is accused of violating user privacy by selling personal data without clear consent -and instead of addressing the allegation directly-it responds by pointing out that the regulator making the accusation has itself been criticized for mishandling sensitive data. And this isn't limited to climate negotiations or data privacy concerns. You see the same dynamic in domestic political debates, in trade wars, in disputes over human rights, and even in boardrooms when companies are pressed on earnings or strategy. Again, the hypocrisy is not imagined—those double standards do exist. But by framing them as somehow shocking, the original issue gets sidelined. The deflection works, and everyone walks away with the illusion that the harder questions have been Takeaway & Why It Matters for Leaders At the heart of this dynamic is the false premise that hypocrisy is rare. The idea that when we find it, it's remarkable or disqualifying. But in business, politics, climate negotiations, and almost every arena, the opposite is true. Hypocrisy is universal. It's part of the human condition because our priorities shift, our ideals and actions don't always align, and trade-offs are unavoidable. That's why this tactic works so well: it feels sensational when it's really just ordinary. And the danger is that some of us allow this moral outrage—justified or not—to distract us from the core issues. To be clear, bringing the dynamic to light isn't about apologizing for hypocrisy. It's about removing a roadblock to conversations that can promote compromise and holding people accountable without letting them deflect tough questions. For boardrooms, understanding this matters. Executives and directors face the same deflections. When a tough question is met with a 'what about them?' response, it's a signal to pause. Leaders who identify the tactic can push past the outrage, stay focused on the real problem, and make decisions grounded in substance, not theater. If hypocrisy is inevitable, the question is whether we'll keep letting it derail progress—or whether we'll push through it to finally address the hard questions at the heart of the matter.
