Eurozone and European Union Q2 2019 growth slows to just to 0.2% (QoQ); Quarterly growth slowest in 5 years

Seasonally adjusted Gross Domestic Product (GDP) rose by 0.2% in both the Eurozone (EA19) and the European Union (EU28) during Q2 2019, compared with Q1 2019, according to a preliminary estimate published by Eurostat. Quarterly growth is now slowest in 5 years.

Eurozone European Union GDP Growth until Q2 2019

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Eurozone government debt to GDP at 86% and European Union government debt to GDP at 81%; Government debt to GDP soars for Cyprus and Greece

Government debt to GDP for the Eurozone stood at 85.9% at the end of Q1 2019 (as against 87.1% at the end of Q1 2018). For the European Union, the number was 80.7% (as against 81.6% at the end of Q1 2018).

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The Federal Reserve has done the right thing by reducing its balance sheet and increasing interest rates to support a thriving economy, why reverse this now?

The Federal Reserve has unwound its balance sheet by 12% over the past year and reduced it to $3.81 trillion (from a peak of $4.5 trillion in 2017).

It has also increased interest rates since from 0.25% (range of 0% to 0.25%) in 2016 to 2.5% (range of 2.25% to 2.5%) now.

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38 countries currently have interest rates at an all-time low

A decade on from the financial crisis, 38 countries currently have interest rates at an all-time low. Ultra-low interest rates seem to be the tool of choice for Central Banks to help stimulate economies globally. But seriously, this a decade on from the financial crisis? Did the world really recover from the financial crisis? Probably not …

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The European Central Bank or ECB balance sheet is 4.7 trillion Euros or over 40% of Eurozone GDP (July 2019 edition)

Apparently, the European Central Bank (ECB) balance sheet was meant to shrink significantly in 2019. It has shrunk just 0.5% in 2019 until July 5th (as against 5% for the Federal Reserve in the same period).

At 4.67 trillion Euros (or around 41% of Euro area or Eurozone GDP), it doesn’t look like things are going to change quickly.

ECB Balance Sheet until July 2019

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Germany still accounts for most of the current account surplus of the European Union

The seasonally adjusted current account of the balance of payments for the European Union was a surplus of €40.5billion or 1% of GDP in the first quarter (Q1) of 2019, up from a surplus of €40.2billion or 1.0% of GDP in the fourth quarter (Q4) of 2018 and down from a surplus of €58.3billion or 1.5% of GDP in the first quarter (Q1) of 2018, according to estimates released by Eurostat.

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