Germany Is Europe’s Sick Man, But Others Are Coughing
Berlin’s woes are well-known, but Italy’s fading growth points to the bloc’s long road to economic health.
Getting feverish.
Photographer: TIZIANA FABI/AFPGermany, the sick man of Europe, is about to end a quarter it would rather forget. The first three months of 2024 probably marked its second straight quarter of economic contraction, and for the full year it’s expected to deliver little to no growth. Its industrial powerhouse has become a liability, with demand still subdued, and a deglobalizing world has robbed it of levers like Chinese exports, cheap Russian gas and a dependable US security guarantee.
The new worry is the coughing sound coming from elsewhere in the euro zone. Economies like trade-dependent Netherlands and Ireland have been big drivers of European growth in recent years (maybe deceptively so in Ireland’s case), but now they’re stalling. France, whose demand-led economy usually zigs when Germany zags, is eking out meager growth despite a swelling budget deficit as higher interest rates bite. Optimism that a recession can be avoided is being tempered by anemic investment and productivity growth.