The eurozone economy recorded its joint-weakest growth in four years this week in the latest of the dreary economic data to hit the bloc. Italy officially announced on Thursday it had plunged into a recession, sparking fears it could have a crippling effect on the rest of the eurozone economies. Gross domestic product (GDP) in the 19 countries sharing the single currency rose by 0.2 percent for the final three months of 2018, meaning it was stuck on its slowest pace of growth since 2014.
David Buik, a markets commentator for Core Spreads, told LBC’s Nigel Farage about an economic slowdown: “0.2 percent strikes me that you are staring over the precipice of a recession.
“Italy, as we know, is in a recession -0.2 percent last time.
“Spain, funnily enough, ironically, is the best performing of the European economy and is up 0.7 percent in the last quarter. But then again, that is from an extremely low level.
“And dear old Blighty – here we are that everybody seems very happy to slag off – we are doing extremely well by comparison – not great but 0.3 percent up until the three months until the end of November.
“And I think we should be very proud of that in light of the circumstances of the desperate uncertainty that the political situation has left us in.
“It is very unsatisfactory that we should be two and a half years down the line with no final decisions made. Of course, it makes people very nervous.”
The quarter-on-quarter rate in the fourth quarter for the eurozone matched that of the third quarter.
GDP reached a new five-year low as it went up by only 1.2 percent year-on-year, the European statistics agency Eurostat said in its first estimate.
Mr Buik then highlighted the key issues with the euro and outlined how it could be improved to make it a fairer monetary system for all EU member states.
He said: “The euro has been absolutely brilliant for Germany and France because it has been at a level where they can be extremely competitive with their exports going out to China and other parts of the world.
“And Germany now is really struggling because they have seen the fall off in China.
“And I have always advocated the line that the euro should be, if it should exist at all and I don’t believe it should, it would be two tiered anyway because the likes of Spain going down to the Iberian Peninsula, to Portugal, Italy and Greece have absolutely no benefit at all in being part of the euro at all.
“They are getting squeezed. Whereby, the really positive parts of their economy are receiving no benefit at all.”
European Central Bank chief Mario Draghi was forced to admit the eurozone economy had continued to perform weaker than expected – blaming global uncertainty for dragging down growth.
Mr Draghi told the European Parliament’s committee on economic affairs in Brussels: “Over the past few months, incoming information has continued to be weaker than expected on account of softer external demand and some country and sector-specific factors.
“The persistence of uncertainties, in particular, relating to geopolitical factors and the threat of protectionism is weighing on economic sentiment.”