The euro area economy grew just 0.1% this spring – its weakest performance since 2024 – as U.S. tariffs disrupted trade and spooked markets. Germany and Italy slipped into negative territory, while Spain's domestic-driven growth (0.7%) offered rare bright spots. 💡
Steel Tariffs Leave 'Germany Hit Hard'
U.S. tariffs on EU metals soared to 50% in May, with German steel CEO Gunnar Groebler calling policies 'erratic.' Though a last-minute deal reduced new tariffs to 15%, experts warn it could still shave 0.2-0.5% off EU GDP. 📉 'This isn’t a win – it’s appeasement,' said trade analyst Julian Hinz.
ECB Bets on Long-Game Recovery
Despite short-term pain, the European Central Bank remains optimistic. President Christine Lagarde highlighted resilient consumer spending and July's PMI rebound to 51.0. With inflation at 2%, the ECB predicts 1.4% growth by 2026. 🚀 But economists warn: '2024’s second half looks rocky.'
