Report
Why the euro-zone countries’ external balance constraint has drastic consequences in the medium term
From the start of the 2010s, the euro-zone countries with savings surpluses (Germany, the Netherlands) stopped lending their surpluses to the countries with savings shortfalls (Spain, Italy, Portugal, Greece). T he latter have therefore faced an external balance constraint since then . This constraint has highly negative effects in the medium term: it has imposed reductions in corporate investment, public investment and some useful public spending, and has therefore contributed to driving down potential growth in these countries. The end of the free movement of capital between the euro-zone countries is therefore one of the causes of the decline in the euro zone’s potential growth. Aside from the implementation of the European recovery plan (Next Generation EU), this situation has not improved since the start of the COVID crisis.
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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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