Rabobank’s Michael Every portrays Europe as stuck near a 1.5% growth path, with German deindustrialisation offset by rearmament and political fragmentation. He highlights EU struggles to implement single-market reforms, tensions over carbon border tax changes, and the difficulty of promoting Euro usage and Eurobonds for stablecoins while third countries remain entrenched in Dollar-based practices.

Deindustrialisation, politics and Euro ambitions

"In Germany, Bosch is to lay off 20,000 workers as deindustrialisation snowballs, yet German rearmament continues. The latter is boosting GDP growth, but without recovery in other industries (and why assume that?), current trends project a very different German economy ahead - more so if Europe doesn’t make the weapons it rearms with. Yet as the US hands over two key NATO command posts to Europeans,"

"On the broader European push to decouple from the US --as it signs up to a US critical minerals plan which implies the complete opposite-- the FT reports ‘EU failing to implement economic fixes as single market withers’, and ‘European alternatives to Visa and Mastercard ‘urgently’ needed’; yet Politico claims this week will show ‘Macron sells a vision of ‘Made in Europe’ that Merz and Meloni aren’t buying’, while ‘European industry revolts over EU plan to weaken carbon border tax’ (Politico), which argues the opposite What is the EU grand macro strategy, exactly?"

"For now, it appears defensive in a different sense. As Politico also notes, ‘Bank of France chief’s surprise exit stokes suspicion among Macron’s opponents’, and the “Governor’s departure allows the French president to future-proof the central bank against a far-right government.”"

"Equally, while Europe is considering issuing more Eurobonds to back Euro stablecoins, and ‘has a plan to challenge the dollar’s global role’, “The sticking point is… changing established practices in third countries using dollars... As a next step, the Commission proposes to "obtain a better understanding of the obstacles for the Euro’s wider use, while fully respecting national choices regarding monetary arrangements.""

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)