Eurozone Watch

Just coming back from a short holiday in Spain, I am now more confident than ever that the Iberian economy is heading for a nasty period of adjustment. Even though growth in Q4 of last year surprised on the upside (0.8 percent quarter-on-quarter compared to 0.4 percent in the euro area as a whole), it already feels like a recession in Spain. Unemployment has risen by about half a percentage point in seasonal adjusted terms since last summer, retail sales and industrial production have dropped below the level from one year ago. The newspapers already write about "la crisis".

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Just a short note that the debate on the Eurozone summit continues (for an analysis of the recent Franco-German tensions of the issue read this post). In an interview published by the French daily Les Echos today (titled "Oui, l'Eurogroupe fait de la politique"), Eurogroup President Jean-Claude Juncker answers questions on the idea of the Eurozone summit, German-French tensions over the issue, needs for the improvement of governance in the EMU, etc.

As the interview is not online in its entirety, here are Juncker's main points which have a relevance for EMU:

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