they re the top three eurozone economies. don t forget you can get in touch with me and some of the team on twitter, i m @bbcbenthompson see you very soon. goodbye. have got harley davidson teapot. we
we are nowjoined by the chief eurozone economist at the consultancy pantheon microeconomics. good news from spain and italy but at the same time germany with a contraction so quite a mixed picture. what does it tell us? i think it tells us that the core economies, france and germany, growth was sluggish at the start of the year and that was offset by very strong growth in southern europe, so spain and italy did well, portugal did well. greece is doing well. there is a bit of divergence so it s good news for the eurozone as a whole because the economy is keeping its head above water. the irish growth rate is volatile and goes up and down like a yo yo so i wouldn t pay too much attention to that. certainly we see divergence now within the major eurozone economies.
largest, you know, eurozone economies, to suffer a blow from the war in ukraine. you know, granted, spain gets more of its gas supplies from algeria and the us and gets more of its oil supplies from saudi arabia and the us. but the way the structure of hills, of energy bills in the eu are priced, you know, it is leading to consumers in spain suffering the most among the eurozone economies so i think this plan has come, it is a step in the right direction but i think it is a bit late so as you just pointed out that has been plenty of strikes. that have taken place. and we already have projections who of gdp for spain for this year already
e.c.b. is also supposed to promote growth politicians aren t allowed to intervene. the powerful institution has 2 main instruments number one the key interest rate the e.c.b. lends money to banks and hasn t charged interest on it since 2016 by doing so it wants to encourage those banks to create cheap loans in turn boosting the economy by promoting investment and outlay. inflation is also supposed to rise the central bank wants it at just under 2 percent if it comes in at less the danger grows that prices could fall long term. the e.c.b. can also buy bonds which is supposed to strengthen national economies it holds private and public sector securities totaling around $2.00 trillion euros. by buying the bonds the central bank affectively pumped fresh cash into eurozone economies which is good for growth but critics complain that s actually not allowed
a to have you with us it is the latest italian drama that has investors on the edge of their seat can italy form a government or will there be new elections possibly opening the door to the euro skeptic league and north party a victory for its leader. could also have huge implications for the entire eurozone italy has the 3rd largest g.d.p. in the euro zone right off to france and germany but its debt to g.d.p. ratio of 132 percent is much higher than that of other major eurozone economies so what happens when the markets lose confidence in italy s ability to rein in its massive debt no banks across the e.u. own loads of italian debt with 286000000000 euros in frogs alone means these banks are exposed should italy default on its debt and just the possibility of such as an aria. it is enough to put those under pressure forcing