The eurozone’s economy appears to have stalled. It was widely expected that growth would pick up to 1 per cent this year, but these estimates are now being toned down as the first two quarters of 2014 have been below expectations. The pattern shown in chart one (below) is, at best, one of stagnation. It is therefore agreed with near unanimity that the eurozone’s economy needs a boost.

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Since its trough in the second quarter of 2009 living standards in the eurozone, measured by real gross domestic product per head, have recovered less than those of other major developed economies, due to less stimulatory fiscal and monetary policies.

Things now seem to be looking up and the eurozone has several relative advantages. It has higher household savings’ rates, lower fiscal deficits and higher unemployment compared with Japan, the UK and the US. Read more

Olivier Blanchard, chief economist of the International Monetary Fund, has egg on his face. He attacked George Osborne, the UK chancellor of the exchequer, for seeking to reduce the UK’s fiscal deficit too rapidly, claiming that it would prolong recession. Mr Blanchard has had to admit that he was wrong but his admission has been reluctant and ungracious. (This is the same mistake that cost former UK culture secretary Maria Miller her seat in the cabinet this month.) Read more