A real concern for the euro zone: Its economic performance has been mediocre despite very low interest rates and squeezed risk premia (until the second quarter of 2018)

From 2014 to the second quarter of 2018, the euro zone benefited from very low interest rates and fully squeezed risk premia. Yet its economic performance has remained mediocre , as investment has hardly got going again . This is indicative of the spontaneous weakness of the euro-zone economy. Now that r isk premia have risen sharply , growth should be expected to be truly weak in the euro zone in the absence of exogenous stimulatory factors (such as a fall in oil prices) .