Currently, many analysts are worried about the prospect of a global slowdown that could send the global economy back into a recession. However, each part of the world has been experiencing this slowdown a little differently. Truthfully, most of this worry comes down to China and the United States, who we have started to see the effects take hold of. In the meantime, the other most influential purchasing power on the planet has continued on a track of slow, but steady, growth that has been the trademark fashion of their union and their leader. We are, of course, talking about the European Union and Germany…
Slow, but steady growth
The European Union has been recovering very steadily, but it has been slow, due to the process of helping some of its more desperate nations come out of a terrible debt crisis. In 2015, the European Union grew at a rate of 1.5%. However, that was relatively even across all four quarters, with the fourth quarter finishing at exactly 1.5%. In the meantime, the United States, which started off strong in 2015, only grew .7% in the fourth quarter. This reveals an anxious possibility that the U.S. economy could begin to drop, and even begin to contract. While we don’t know this to be the case, it does highlight the relative stability that the European Union has been able to demonstrate.
Consumer spending has been to thank
The reason that the European Union has been able to achieve this stability is due to the great effort that they have put into keeping public confidence in the economy relatively high. This confidence translates into consumer spending, which has kept the boat of Europe’s economy from needing to take measures to prevent it from falling. Ironically, one factor to consider for why consumer spending has been able to increase has come from a humanitarian issue, rather than an economic one. The influx of refugees from the Middle East has produced a batch of new consumers that have contributed to these numbers. In Germany, in particular, these refugees have been predicted to increase consumer spending somewhere between 2-3%.
Italy and Greece need to recover
One thing that could prove to be an Achilles heel to the European Union is the poor economic standing of several of its lower-performing countries. In this case, it happens to be Italy and Greece, who were both hot incredibly hard by the debt crisis. Both of those countries only grew by a measly .1%, in 2015. This puts both of them in great danger of contracting. However, this is a time when the benefits that the European Union has could come into play. After all, the Union is only as strong as its weakest members.