The euro area needs a much more structured economic policy, with instruments that we still don’t have today, and it needs responsible fiscal policies. That’s the part that still needs to be completed. The situation in Europe is not just linked to stability or the lack of industrial policy. The countries with declining populations are not driving forces.
What are the positive signs for Europe? The ECB’s diagnosis of the euro area economy is the following. The slowdown we have seen since 2018 didn’t come as a surprise. 2017 saw a very strong cyclical recovery supported by dynamic global trade and strengthened, somewhat artificially, by a mistimed fiscal boost in the United States. We knew that it couldn’t last.