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Euro Area Strengthens, Merkel Remains a Major Player

The most awaited news for the Euro zone was the result of the German elections. As everybody was expecting, Angela Merkel’s Conservative Party won with 41.4% of the vote while her Liberal partner failed to make it into the Parliament. The result of the election pleased central banks as urgent matters concerning their activity need the involvement of the chancellor who now is finally established.

Today were released the PMIs for the services and manufacturing sectors for French, Germany and the Euro zone. Read one of my previous article, you can understand better what a PMI means. Thus, the PMIs in the services sector beat all expectations, reflecting a propulsion of 1.8 points for French, 1.6 points for Germany and 1.4 points for the Euro zone. Is encouraging to see that the French services sector overcame the 50 points threshold, showing that the field is expanding for the first time since January 2012.

Today Mario Draghi gave another speech. He maintained his positive thinking about the slow recovery of the Euro zone, while keeping the low interest rates for an extended period of time. A refinancing operation may be needed for the European banking system and Draghi is ready to use any tool required in order to improve the results of the economy. The next concerning matter is again Greece which is currently asking for another tranche of funding worth 1 billion euro. Regarding the latest decision on the United State’s territory, the chairman of the European Central Bank expressed his approval for the decision to continue with the Quantitative Easing program as long as needed.

For the moment the Euro zone is going through a period of silence as Angela Merkel remained the Chancellor of Germany and will continue to approach the European crisis as before. On the other side, the European economy keeps giving positive signals, even if they are less significant, they are considered steps towards a sustainable growth.

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