Eurozone: Varoufakis discusses the 'greatest beneficiary' in 2018
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The coronavirus pandemic has left the EU’s economies on their knees at a time they were still struggling to recover from the 2009 economic crisis. Spanish economist Stuart Medina Miltimore believes eurozone countries, especially in Southern Europe, will struggle to go back to pre-pandemic levels before 2026.
Mr Medina also argued the EU elites in the countries most affected by the crisis will fail to take citizens’ interests into account above those of large corporations and the European Union machine.
He told Express.co.uk: “It’s true that the eurozone would have collapsed if we had stuck to the rules of the European Union treaties which banned the European Central Bank from acquiring or purchasing bonds [in 2009].
“They started doing that in 2011. If we hadn’t done that, the southern European nations and Ireland would have probably gone insolvent.
“So what really saved the eurozone wasn’t Mario Draghi, it started before Mario Draghi was the President of the ECB – I think he is seriously overvalued.
“Right now I don’t think the [Recovery] funds will do much because it’s a really small amount of money in the end.
“I think what will happen is that we’ll have a prolonged recession and many more years of high unemployment in southern Europe and insufficient growth.
“We won’t go back to the GDP we had in 2019 until probably 2024, 2025, or even 2026.
“I think the problem is that the elites in Spain, in Portugal, in Italy and to an extent in Greece, are firmly aligned with the European project.
“And it doesn’t matter what the evidence says or the consequences for the population of those countries.
“It’s in the interest of the large corporations, the media, the political parties that are firmly supporting the European Union.
“So it doesn’t really matter how much damage is done to those countries.”
The warning came as a data release from Eurostat showed industrial production in the eurozone – referring to the 19 countries which have adopted the euro as their currency – marginally contracted by 0.3 percent month-on-month in June.
The disappointing figures, published last week, followed on from May’s one percent contraction.
On an annual basis, June’s industrial output levels were up by 9.7 percent, compared to the 20.6 percent increase witnessed in May.
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However, the numbers are distorted by base effects from last year’s pandemic-induced slump in economic activity.
Oliver Gatland, an economist with the Centre for Economics and Business Research (Cebr), which has been analysing the figures, commented: “Improved consumer confidence amid the easing of lockdown restrictions and a shortage of many key commodities is causing demand to outstrip supply, which may add to inflationary pressures in the eurozone.
“In light of the continued disruption to manufacturers, consumers are likely to drive growth in the currency union.
“Cebr forecasts GDP growth of 4.9 percent across 2021 as a whole.”
June’s slight drop in industrial output reflects ongoing disruption to supply chains, a key challenge for the economic recovery in the eurozone this year, the CEBR concluded.
However, supply has been sluggish in catching up with demand, with shortages of many key commodities, such as steel and semiconductors, driving the issue.
Some countries had witnessed increased industrial output, with Malta seeing the largest growth of 5.2 percent, the report said.
However, these were outweighed by a number of other countries experiencing contractions in output, with Ireland and Portugal exhibiting the largest declines, of 4.4 percent and 2.6 percent respectively.
The report added: “Despite June’s fall in industrial output, there are some signs that the eurozone’s economic recovery is strengthening.
“Key amongst these is the vaccine rollout, with an estimated 73.1 percent of adults in the European Union having received their first COVID-19 vaccination and 62 percent being fully vaccinated.”
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