Report
Euro zone: What prevented a rapid recovery after the subprime crisis?
The economic recovery in the euro zone after the 2008-2009 subprime crisis was very slow. There was even a double-dip recession. Will there be a repeat of this outcome after the COVID crisis? Some factors weakening the euro-zone economy after the subprime crisis will not be present today: rapid fiscal deficit reduction; the debt and balance of payments crisis in the peripheral countries; But other factors weakening the economy will be present again: weak investment and capital accumulation due to the increase in corporate debt and bankruptcies; the fall in productivity gains due to underinvestment , under the effect of the presence of zombie firms , and the loss of human capital caused by the rise in unemployment; high employment protection, which reduces the pace of the fall in unemployment; And some new factors weakening growth are appearing: the need to reallocate employment from struggling sectors to growth sectors; the loss of productivity due to the new health regulations.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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