“In a twist of fate, tail-enders became leaders. Greece, Spain and Portugal grew in 2023 more than twice as fast as the eurozone average, while Italy was not far behind,” write journalists Liz Alderman and Melissa Eddy in the New York Times.
“Just a decade ago, southern Europe was at the center of a debt crisis that threatened to break up the bloc of countries using the euro. It took years and tough austerity programs to recover from deep national recessions and multibillion-dollar international bailouts. Since then, the same countries have worked to fix their economies, attracting investors, reviving growth and exports, and reversing record unemployment.”
Germany narrowly avoided recession in the first quarter of 2024, growing by 0.2%. By comparison, growth in Spain and Portugal more than tripled over the same period, showing that Europe’s economy continues to grow at two speeds.
“After years of bailouts and harsh austerity programs, southern European countries have made critical changes that have attracted investors, revived growth and exports, and reversed record unemployment,” write New York Times reporters, highlighting notable successes including others, the “reduction of red tape” and “changes in the once inflexible labor markets” of the European South.
The countries of the South gave weight to services and especially tourism, which has brought record revenues after the pandemic. In addition, they benefited from the package of a total of 800 billion euros activated by the European Union with the aim of helping European economies to recover from the pandemic.
“Greece’s economy grew last year at about twice the rate of the eurozone average,” write Liz Alderman and Melissa Eddy in the New York Times, singling out as factors behind this growth the investments made by multinational companies such as Microsoft and Pfizer, records in tourism and investments in renewable energy sources.
“But can Southern Europe stay on the same upward trajectory?”
“Yes, for now at least,” replies the New York Times, citing inflation that was steady at 2.4% in April in the euro zone, which may favor tourism.
The European Central Bank has indicated it could cut interest rates at its next meeting in early June, while countries such as Spain, Greece and Portugal are also set to benefit from efforts to diversify their economies, according to the same article.
Beyond that, however, Athens, Madrid and Lisbon will have to build on the momentum, boosting the productivity and competitiveness of their economies, against a background of thorns that may have been bent but remain as they are: unemployment, inflation and debt.
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