Europe: IMF – even a minor shock could tip it into recession
A fragmented market is holding back business growth
(Il Sole 24 Ore Radiocor) - Europe continues to suffer from its inherent weakness and low potential growth; even a further minor shock could trigger a recession. The International Monetary Fund’s report on Europe, published today, pulls no punches: Europe is now less resilient, and even once energy prices have returned to their natural range, it will still have to grapple with its problems. The Washington-based institution’s list has not changed significantly from the past, with the addition of current issues such as ‘pressures on public spending and the rise in sovereign yields’. The list that remains unchanged is that of structural weaknesses, according to the Fund: low productivity, reflecting a lack of scale and innovation. ‘Europe once stood at the global forefront of productivity, but has gradually lost ground. Although some reform efforts are under way – as stated in the European Department’s report – the EU single market remains incomplete, and the presence of national barriers makes it more difficult for businesses to adapt, scale up and access a wider market.”
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