Weaker eurozone growth figures should serve as a 'jolt' to German chancellor Angela Merkel
The EU’s own statistics office this morning revised downwards their estimates for growth among 19 eurozone countries in the last three months of 2016, from a 0.5 per cent to 0.4 per cent increase in GDP.
Germany, the bloc’s powerhouse economy, mirrored the lower than predicted growth figures for the whole eurozone – with the nation’s own statistics body outlining a 0.4 per cent boost to GDP for the country in the same period, below an expected 0.5 per cent increase.
Italy also fell 0.1 per cent short of expected growth in the final quarter of 2016, with the country’s economy expanding 0.2 per cent.
Commenting on the growth figures, top economist Patrick Minford claimed they revealed how “fragile” the eurozone economies are, with Italy’s banking system in particular in “terrible trouble”.
The Cardiff University academic told Express.co.uk: “They’re growing slowly, they're just recovering from a long recession and a crisis – and there's still crisis problems.”
Theresa May hopes to agree a free trade deal with the EU once Britain leaves the bloc in the face of EU resistance to such an agreement.
Professor Minford claimed the fragility of other EU economies means anything other than continuing the status-quo of tariff-free trade terms could prove disastrous for the remaining 27 member states.
He said: “Certainly the last thing Europe wants is the absence of a good agreement with the UK which leads to barriers between our two economies.
“We are the biggest consumer market in Europe. The last thing they want is to stop selling things to us, it really could tip them into a bad recession again.”
“They really need to avoid any sort of tariffs – either them putting tariffs on us or us putting tariffs on them – they need a trade agreement with us very badly.
“I think that's in everybody's interests, to keep an absence of any barriers between us. That's the last thing anybody wants.”
Certainly the last thing Europe wants is the absence of a good agreement with the UK which leads to barriers between our two economies.
Top economist Patrick Minford
Get Quotes on Home Insurance
In contrast with today’s eurozone growth figures, the UK economy grew by a better than expected 0.6 per cent in the final three months of last year – an improvement of 0.1 per cent on predictions.
This defied pre-referendum predictions of economic disaster in the event of a Leave result on June 23.
Professor Minford, a former economic adviser to Margaret Thatcher, described the Brexit vote last summer as a wish by the UK public to “consolidate the fact our economy is operating well” compared to European economies.
He added: “It's in order to consolidate…. and to avoid all those regulations, unskilled immigration problems and the high protectionist policies – particularly on food – that we left the EU.”
May's Brexit speech: World reacts LIVE
Tue, January 17, 2017
Politicians and celebrities tweet their reaction as Theresa May unveils her 12 point plan for Britain leaving the EU.
1 of 8
President of the European Council, Donald Tusk tweets his frustration.
Mihir Kapadia, founder and chief executive of Sun Global Investments, also warned EU nations to look at their faltering growth figures before preparing to ditch free trade with the UK.
He said: “The GDP figures across the EU have been below par, and once again it reinforces the need for the trading block to continue the status-quo especially with regards to its relationship with a post-Brexit Britain.
“The fourth quarter figures of Netherlands, Germany and Italy have indicated a performance rise of just 0.5 per cent, 0.4 per cent and 0.2 per cent respectively, a worse performance than expected.
“The GDP figures of Germany are especially concerning since it is the largest powerhouse of the EU, and it has lagged behind the UK which aggregated a 0.6 per cent growth rate in the same quarter.
He added: “This figure could now act as a jolt to Germany and thereby to the rest of the EU27, to be mindful of their economic participation and trade with the UK after Brexit is completed.
“Exports form a large chunk of the economy and it would be of the best interest of both parties to collaborate on a free trade deal.
“With the UK in the driver seat, having clocked the largest growth amongst G7 in 2017, they will be entering the negotiations with an extra card in the pack.”