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European fiscal strains getting worse

It was revealed this week that France’s deficit in 2025 was much higher than expected, adding to concerns about Europe’s public finances. While the EU’s fiscal rules do not kick in until 2025, it now looks like austerity may not be as “light” as we previously anticipated and is another reason to expect euro-zone economic growth to remain weak. Next week, we expect to learn that core inflation in the euro-zone edged up in March.

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