Perhaps you have been wondering about why I have not bee writing much lately on the Eurozone. Actually, I have but I have been choosing other outlets for various reasons. However, I do not think that you, my dear reader, should be left out of the loop. So here are the links to my two recent notes on the Eurozone.
First off I have a post up at GEM which takes on a structural assessment of the Eurozone.
2006 was a good year in the Eurozone, there can be no doubt about that. We do not yet have the annualized figures but we are probably hovering around 2.5% growth in GDP which is well above growth rates for 2004 and 2005 which registered 1.4% and 1.5% respectively. As such 2006 will be marked as the year when the Eurozone broke all growth records. Yet, should we be bearish or bullish on the Eurozone going forward? In terms of the general consensus there seems to be no end to the upbeat mood among market commentators and although Q1 of 2007 is likely to put a dampening effect on the optimism the general perception is that fiscal tightening and a process of interest rate normalization at the ECB won't stop the sustainable recovery.
... and secondly I have just been given a guest post slot over at AFOE which I have used initially to voice my thoughts on the German VAT hike.
I am very happy to be back here at AFOE, if not only, for a brief one-stop guest post about the economics of the German VAT hike and more specifically how market commentators and analists might just be reading the German economy somewhat falsely at the moment in the sense that they are not taking into account the implications of the sustained and evolving process of ageing in the German society. Indeed as Edward noted just a few days ago here at AFOE we might actually be talking about a clash of paradigms or at least a clash between two ways of looking at and interpreting the economic data coming out of Germany and indeed of the entire Eurozone. There are consequently many venues on which this diagreement is fielded and an important one of these is the German economy and more specifically the significance of the VAT hike and below the fold I will give my view on this topic.