Lately, I had a sensation that the European Central Bank (ECB) is trying to disguise and deny at any cost the fact that the Eurozone economy is in pretty good shape.

Board members of the central bank often begin their conferences or interviews by acknowledging that things are getting better, but they almost immediately follow up with a comment that slower growth is a real possibility. We can also observe this unnatural pessimism when they speak about future monetary policy. They often repeat that the central bank could extend and expand its purchases of government and corporate bonds and that interest rates will remain low for an extended time. Never ever have we heard from an ECB board member that the ECB´s asset purchase program might be reduced and discontinued or that we should count on higher interest rates in the near future.

In the meanwhile, this despondency is taking bizarre forms. If we take a look at how the economy is performing, then we must conclude that the Eurozone is not doing a bad job. It might be a surprise to many, but it is the simple truth: the Eurozone is outperforming the U.S. when it comes to economic growth! And remember that in the U.S. the central bank is in the process of raising interest rates – purchases of government bonds has ended a long time ago – because the economy is improving!

Eat That USA!

Source: eurostat

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