The Future of Europe Macro challenges and market opportunities in a more dangerous world The future of Europe series The Future of Europe Group Chief Economist Neil Shearing introduces the Future of Europe series. Is the current optimism about Europe justified? What's gone right for Europe - and what will continue to hold it back. Fiscal stimulus won’t fix Germany’s economy Germany’s fiscal easing has lifted sentiment toward Europe, but it won’t fix the country’s long-term outlook or Europe’s global competitiveness. Three key questions on European markets Is the repricing of European risk assets sustainable? This analysis grapples with one of the big themes in global markets this year. Euro-zone debt dynamics: no longer core vs periphery Here's why euro-zone governments are likely to continue running large budget deficits, and what that means for interest rates. The UK’s future in Europe From defence to trade to reversing Brexit, here's how far the UK's "EU reset" will – and won't – go. Is the euro's share of global FX reserves set to rise? How looser fiscal policy could set the stage for the euro to expand its role as a reserve currency over the coming years. A European defence revolution? We've seen the initial steps - but here's why a defence revolution won't transform Europe's prospects just yet. Three key questions on the outlook for Europe’s financial markets We think European equities have turned a corner, while euro-zone bond markets look more robust, and the euro will hold on to some of its recent gains. Expansion & integration: the future of EU enlargement The EU's expansion in the coming years won't be anywhere near as impactful – nor as beneficial for its new members – as its enlargement was in the 2000s. Is one policy rate appropriate for all of the euro-zone? At present, there seems to be no major differences between the appropriate interest rate in the four largest euro-zone economies. ECB strategy review not just a formality The ECB’s forthcoming assessment of its 2021 strategy review won’t lead to immediate policy changes but we think it will commit policymakers to acting differently in future. Europe In data Euro-zone Debt Sustainability Monitor Europe's Macro Imbalances Europe Macro Database Other key Europe analysis Europe Economics Focus Defence and growth in Germany: a closer look We think Germany is likely to raise defence spending by around 1.5% of GDP between 2024 and 2027. With the government unlikely to cut other spending much and the defence industry well placed to raise... 2nd April 2025 · 18 mins read Europe Economics Focus French public debt: trouble brewing Developments over the past year have put France’s public debt on a steeper upward path, with the debt ratio now likely to rise from 113% of GDP last year to around 126% by 2030. We see little chance... 21st January 2025 · 14 mins read Europe Economics Focus The slow agony of Germany’s auto industry One of the many problems that the next German government will have to contend with is the struggling car sector. Unfortunately, the sector’s challenges are only likely to intensify given the prospect... 27th November 2024 · 29 mins read Europe Economics Focus How far will the EU go on Capital Markets Union? EU policymakers have stepped up their calls for progress towards Capital Markets Union and there will be steps in that direction in the coming years. But we aren’t holding our breath for major change... 31st January 2025 · 14 mins read Latest Europe economic and market coverage See all our Europe coverage Emerging Europe Rapid Response Hungary Interest Rate Announcement (June) 24th June 2025 · 2 mins read Commodities Update Oil market fundamentals snap back into focus The Israel-Iran ceasefire is likely to prove fragile. But so long as both parties show themselves unwilling to attack export-related energy infrastructure and/or disrupt shipping flows through the... 24th June 2025 · 3 mins read Europe Rapid Response Germany Ifo Survey (June 2025) The rise in the Ifo BCI in June suggests that activity in Germany has not yet been meaningfully hit by US tariffs. But output remains weak and we think a proper recovery will only materialise next... 24th June 2025 · 2 mins read Commodities Update Five Key Questions on the Strait of Hormuz This Update answers five key questions about a potential “closure” of the Strait of Hormuz and the potential impacts on global energy markets from any attempt to close the waterway. As it stands, it... 23rd June 2025 · 5 mins read Europe Economic Outlook Europe Outlook: Inflation at the target but growth will be weak The euro-zone’s strong first-quarter growth rate was a result of tariff front-running and will be reversed in Q2 and be followed by weak growth in the second half of the year. Further ahead, we think... 23rd June 2025 · 28 mins read UK Economics Rapid Response UK Flash PMIs (Jun. 2025) June’s composite PMI is consistent with GDP doing little more than flatlining in Q2, the Bank of England will be reassured that the recent cooling in the labour market finally appears to be weighing... 23rd June 2025 · 3 mins read Europe Rapid Response Euro-zone Flash PMIs (June 2025) June’s flash PMI survey for the euro-zone was consistent with the economy flat-lining. The recent jump in energy costs has not yet fed through to output prices, but the uncertainty created by the... 23rd June 2025 · 3 mins read Emerging Europe Economics Weekly Emerging Europe Weekly: Israel-Iran: conflict scenarios and spillovers The continued Israel-Iran military strikes are likely to have a limited direct impact on Israel’s economy – so long as the conflict remains confined to a matter of weeks. But the risk of escalation is... 20th June 2025 · 8 mins read Table of Contents The Future of Europe series Europe in data Other key Europe analysis Latest coverage
Europe Economics Focus Defence and growth in Germany: a closer look We think Germany is likely to raise defence spending by around 1.5% of GDP between 2024 and 2027. With the government unlikely to cut other spending much and the defence industry well placed to raise... 2nd April 2025 · 18 mins read
Europe Economics Focus French public debt: trouble brewing Developments over the past year have put France’s public debt on a steeper upward path, with the debt ratio now likely to rise from 113% of GDP last year to around 126% by 2030. We see little chance... 21st January 2025 · 14 mins read
Europe Economics Focus The slow agony of Germany’s auto industry One of the many problems that the next German government will have to contend with is the struggling car sector. Unfortunately, the sector’s challenges are only likely to intensify given the prospect... 27th November 2024 · 29 mins read
Europe Economics Focus How far will the EU go on Capital Markets Union? EU policymakers have stepped up their calls for progress towards Capital Markets Union and there will be steps in that direction in the coming years. But we aren’t holding our breath for major change... 31st January 2025 · 14 mins read
Emerging Europe Rapid Response Hungary Interest Rate Announcement (June) 24th June 2025 · 2 mins read
Commodities Update Oil market fundamentals snap back into focus The Israel-Iran ceasefire is likely to prove fragile. But so long as both parties show themselves unwilling to attack export-related energy infrastructure and/or disrupt shipping flows through the... 24th June 2025 · 3 mins read
Europe Rapid Response Germany Ifo Survey (June 2025) The rise in the Ifo BCI in June suggests that activity in Germany has not yet been meaningfully hit by US tariffs. But output remains weak and we think a proper recovery will only materialise next... 24th June 2025 · 2 mins read
Commodities Update Five Key Questions on the Strait of Hormuz This Update answers five key questions about a potential “closure” of the Strait of Hormuz and the potential impacts on global energy markets from any attempt to close the waterway. As it stands, it... 23rd June 2025 · 5 mins read
Europe Economic Outlook Europe Outlook: Inflation at the target but growth will be weak The euro-zone’s strong first-quarter growth rate was a result of tariff front-running and will be reversed in Q2 and be followed by weak growth in the second half of the year. Further ahead, we think... 23rd June 2025 · 28 mins read
UK Economics Rapid Response UK Flash PMIs (Jun. 2025) June’s composite PMI is consistent with GDP doing little more than flatlining in Q2, the Bank of England will be reassured that the recent cooling in the labour market finally appears to be weighing... 23rd June 2025 · 3 mins read
Europe Rapid Response Euro-zone Flash PMIs (June 2025) June’s flash PMI survey for the euro-zone was consistent with the economy flat-lining. The recent jump in energy costs has not yet fed through to output prices, but the uncertainty created by the... 23rd June 2025 · 3 mins read
Emerging Europe Economics Weekly Emerging Europe Weekly: Israel-Iran: conflict scenarios and spillovers The continued Israel-Iran military strikes are likely to have a limited direct impact on Israel’s economy – so long as the conflict remains confined to a matter of weeks. But the risk of escalation is... 20th June 2025 · 8 mins read
