Every other Tuesday, we release 5 Minutes for Business, a publication written by Hendrik Brakel, our Senior Director of Economic, Financial and Tax Policy. In these publications, Hendrik briefly describes current issues that affect the Canadian economy and provides insight on what it will mean for Canadians today and the future. This week’s edition looks at Europe to examine the risks and challenges ahead for those economies and what it all means for Canadian business. Collectively, the European Union is Canada’s second largest trading partner, and the world’s largest market with a $17 trillion economy, more than 20% of the global GDP.
Media coverage of the EU has been focused on fears of another economic crisis. Indeed, GDP growth remains weak, unemployment is still high and there are tough challenges ahead. Greece undoubtedly needs debt relief, which will be a big political problem, but the overall European outlook is improving. The crisis forced governments to undertake much-needed reforms, from more flexible labour markets to improved regulation. At the same time, the European Central Bank is providing a tonne of liquidity, €60 billion per month, to support bank lending and lower interest rates. The EU economy has shown resiliency and today, even the troubled economies of Southern Europe are returning to growth. The road to recovery will continue to be bumpy, but if businesses can look ahead to the long term, they will see enormous opportunities.
Read 5 Minutes for Business.