In the News

Euro Zone recovery gathers momentum

Geoff Riley

28th May 2017

Whisper it quietly but the economic upturn in the Euro Area seems to be gathering some momentum. Unemployment is now at a seven year low - although it remains stubbornly above levels in the UK for example, and real GDP growth is being supported by the continued policy of ultra low interest rates and a weaker Euro.

A quick heads up on some of the key data:


  • The euro area unemployment rate was 9.5% in March 2017 down from 10.2% in March 2016. This is the lowest rate recorded in the euro area since April 2009. 
  • Over the last year, unemployment has fallen in 23 of Europe's 28 member states
  • The lowest unemployment rates in March 2017 were in the Czech Republic (3.2%), Germany (3.9%) and Malta (4.1%). The highest unemployment rates were in Greece (23.5%) and Spain (18.2%).


  • A year ago there were more Euro Area countries in deflation than with prices rising.
  • Euro area annual inflation was 1.9% in April 2017. In April 2016 the rate was -0.2%. 
  • The move away from deflation has been helped by a weaker Euro against the US dollar

Economic growth

  • Seasonally adjusted GDP rose by 0.5% in the euro area during the first quarter of 2017 and real GDP rose by 1.7% in the euro area over the preceding twelve months

Fiscal deficits

  • Stronger economic growth and falling unemployment is helping many Euro Area governments to make progress in cutting their fiscal (budget) deficits.
  • Some Euro Area governments are running budget surpluses - these include Luxembourg (+1.6%), Malta (+1.0%), Sweden (+0.9%), Germany (+0.8%), Greece (+0.7%), the Czech Republic (+0.6%). In contrast, Spain (-4.5%), France (-3.4%) both have fiscal deficits above 3% of GDP.

National debt

  • At the end of 2016, the lowest ratios of government debt to GDP were recorded in Estonia (9.5%), Luxembourg (20.0%), Bulgaria (29.5%), the Czech Republic (37.2%), 
  • Sixteen Member States had government debt ratios higher than 60% of GDP, with the highest registered in Greece (179.0%), Italy (132.6%), Portugal (130.4%), Cyprus (107.8%) and Belgium (105.9%).

Note: Euro Area: 

The euro area includes Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland. 

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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