ECONOMY OF EUROLAND – STRUCTURAL CHALLENGES

Andrei Rădulescu ()
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Andrei Rădulescu: Institute for World Economy

Romanian Economic Business Review, 2024, vol. 19, issue 3, 29-40

Abstract: The economy of Euroland underperformed USA and China in terms of the growth pace in 2023 and 2024, and this situation is going to persist in the future, according to the forecasts of the international financial instiutions. This weak growth pace of the GDP in Eurozone has been determined by structural factors, including the deterioration of international competitiveness (exacerbated by the consequences of the geo-political tensions), the lack of the implementation of the Capital Markets Union (with negative impact for the cost of financing and for the access to capital), and the discontinuity of the structural reforms. This paper presents the structural challenges for the economy of Euroland, by employing standard econometric methods and the database of Eurostat (quarterly observations). The results of the econometric estimates point to the deceleration of the annual pace of the potential output in the region in the recent years, given the severe deterioration of the fixed investments. In fact, Euroland continues to be confronted with the same long lasting challenges, competitiveness and convergence. In this context, structural reforms should be accelerated and new measures to improve the economic integration and convergence within Euroland should be implemented, in order to put the region back on track.

Keywords: Euroland economy; potential output; investments (search for similar items in EconPapers)
Date: 2024
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