Europe’s economy at last shows signs of a recovery

Photograph: Reuters

Sep 10th 2025|3 min read

On the face of it, the European economy is in a grim situation. The IMF forecasts average growth of just 0.4% this year for the continent’s three largest economies—Germany, France and Italy—rising to barely 1% in 2026. On September 8th the French government fell, owing to disputes about how to close the country’s outsize budget deficit, prompting its benchmark bond yields to rise to the level of Italy’s for the first time since the creation of the euro in 1999. President Donald Trump is levying tariffs, the war in Ukraine continues unabated and Chinese commercial competition is becoming only more fearsome.