Commentary If we looked at most investment bank outlook reports for 2021, one of the main consensus themes was a strong conviction of a rapid and robust eurozone recovery. They were wrong. Last week, Capital Economics joined other analysts and downgraded eurozone growth, highlighting: “We now think that the euro-zone economy will recover more slowly than we previously anticipated, growing by about 3 percent this year and 4.5 percent in 2022. Meanwhile, euro-zone government bond yields seem unlikely to fall much further, and with Treasury yields set to increase significantly, we expect the widening yield gap to cause the euro to weaken against the U.S. dollar.” This wave of downgrades, which includes the Organization for Economic Co-operation and Development (OECD) and European Central Bank estimates, comes with the same-old and tired upgrade of next year’s expectations, which will likely be downgraded again further down the line. Most politicians blame the eurozone …
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