2018 Second-Quarter Forecast

Europe

To the west of Eurasia lays Europe, a region predisposed to division. It is surrounded on nearly all sides by islands and peninsulas that make it difficult for Europe to cohere. The northern half of the continent, moreover, sits on a plain whose short, meandering rivers tend to empower countries without forcing them to work with others. The southern half is situated on more mountainous terrain that has historically impeded the creation of strong, unified economies. As a result, Europe is a continent riven by pockets of distinct cultures whose differences are all too often irreconcilable.

Mar 9, 2018 | 15:58 GMT
Europe is a continent riven by pockets of distinct cultures whose differences are all too often irreconcilable.

Europe is a continent riven by pockets of distinct cultures whose differences are all too often irreconcilable.

(canadastock/Shutterstock.com)
section Highlights
  • The European Union will negotiate ways to boost spending, share financial risk, tax technology giants, and overhaul the bloc's agricultural and cohesion funds in the coming quarter.
  • However, the divided bloc will water down, postpone or only gradually implement the proposed measures.
  • Italy, saddled with a hung Parliament, probably won't make disruptive moves that would precipitate a eurozone crisis. By the same token, it will have a tough time enacting reforms meant to stave off trouble for the currency area down the line.
  • Though the United Kingdom and the European Union will negotiate the terms of their trade relationship once the Brexit is complete, they won't reach a firm deal in the next three months.
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