European Uncertainty

As the Greek crisis approaches conclusion, the overall economic health of the EU comes into question.

While there has been recovery (the Eurozone is growing at an annual rate of 1.3 percent), it has been sporadic.

In the second quarter of the year France and Italy, which account for 40 percent of the Eurozone economy, slumped. Italy, which had only recently emerged from recession, fell back, managing growth of just 0.2 percent.

Unemployment numbers are also troubling:

Unemployment (June 2015)

  • EU 9.6 percent
  • Eurozone 11.1  percent
  • Greece 25.6 percent (April)
  • Spain 22.5 percent
  • Italy 12.7 percent
  • France 10.2 percent
  • Germany 4.7 percent

Source: Eurostat

Other challenges remain.  Germany is doing well but its exports will be impacted by a slowdown in Asia, many new jobs are temporary, unemployment figures remain high, and future energy prices are uncertain.

EuroAreaGDP

What Does This Mean for Florida?

Europe has traditionally been an important source of foreign direct investment to the state.  An uncertain economic future for Europe could lead to more European companies considering expansion or relocation to stronger and more stable economic environments such as Florida.  Further slowdown in Asian economies could also lead to an interest in diversification and the pursuit of other markets which Florida could serve as a point of entry to.

 

LEARN MORE:

Positioning Florida as a strategic and important destination for foreign direct investment (FDI) is a key strategy. This is a strategy identified in the Florida Chamber Foundation’s most recent Trade and Logistics study. To learn more about how the Florida Chamber is work to build Florida’s international relationships, contact Alice Ancona today at aancona@flchamber.com.

Greek Crisis: A Rescue Deal with Tough Conditions

Eurozone leaders have agreed to give Greece up to €86 billion ($96 billion) in fresh bailout loans that requires Greece to pass even tougher measures than the ones they rejected overwhelmingly in a referendum on July 5. The political climate and Greece’s severely worsening economy will make this a tough hurdle to overcome in order to remain in the Eurozone.

Many analysis fear that this program will be difficult for Greece to stick to and may be too much for it to bear, creating more political instability for the nation.

Among the bailout deal’s still pending issues is that Greece and the Eurozone still need an additional €4.2 billion for Greece to pay the European Central Bank by July 20- when a Greek bond debt falls due. Avoiding default is essential to reopening Greece’s banks.

Greece defaulted on a €456 million payment due to the International Monetary Fund earlier, increasing its debt by €2 billion. The IMF can’t lend any more cash to Greece until it clears its debts with the fund. Click here to see what Greece owes and when.