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Brian Martin, analyst at ANZ, suggests that the slowdown in euro area growth is exposing an overreliance on monetary policy to support demand and pressure for fiscal easing is growing.

Key Quotes

“The nomination of Germany’s Ursula von der Leyen as new EU Commission president suggests a conservative approach to a common European fiscal budget will prevail.”

“The ECB will continue to argue in favour of fiscal expansion within the context of sustainable public finances. That is vitally important in a monetary union.”

“Pressure for a more expansive fiscal policy in Germany is growing. That would support higher levels of aggregate demand at home and in the euro area and help to rebalance Germany’s large external surplus.”