EU Commission: Eurozone growth 2025 revised upwards, but Italy remains in trouble
Europe expects better-than-expected 2025 growth thanks to stimulus and the Recovery Fund
From our correspondent Beda Romano
BRUSSELS - It turned out to be better-than-expected 2025 economic growth. According to the European Commission's autumn forecast, published on Monday 17 November, the eurozone's gross domestic product is expected to rise by 1.3 per cent, compared to an estimate in May of 0.9 per cent. At the same time, there is no shortage of risks linked to the performance of the stock exchanges. The situation in Italy is much worse. The EU executive expects growth this year of only 0.4%.
"Even in an unfavourable environment, the EU economy has continued to grow," Economy Commissioner Valdis Dombrovskis explained in a statement. Now, given the difficult external environment, the Union must take decisive action to unlock internal growth. This means speeding up our work on the competitiveness agenda, including simplifying regulation, completing the single market and promoting innovation'.
The European economy withstood the shock caused by the arrival of the unpredictable Donald Trump in the White House and his unilateral strategy, especially in the field of trade, better than expected. Most likely, the money from the Recovery Fund has supported economic activity in many eurozone countries. As mentioned, the 2025 estimate of 1.3% growth in the currency union is better than last May's estimate of 0.9%. In 2026, growth is expected to be 1.2 %.
"Downside risks continue to dominate," the EU executive warns in the report. "Persistent trade policy uncertainty continues to weigh on economic activity, in a context where tariffs and non-tariff restrictions could constrain economic growth more than expected. A further escalation of geopolitical tensions could intensify supply-side shocks'. Brussels also puts the emphasis on possible stock market crashes.
The European Commission's economists warn in their report: 'A reassessment of risks in equity markets, particularly in the US technology sector, could affect investor confidence and financing conditions'. Among other things, the EU executive stresses the 'challenges to the independence of the Federal Reserve' and 'concerns about fiscal sustainability in the US'.
