Fiscal austerity, banking, economic and political reform to impact the Eurozone
How the Eurozone will impact growth
Here we outline how the Eurozone will impact growth in the economy and how we could get a glimpse of a more integrated Eurozone. We also look at how fiscal austerity will impact businesses.
The biggest challenge Eurozone policymakers will face is to keep up the pace of fiscal, banking, economic and political reform.
- This will be tough in the face of continuing bad economic news and potential social unrest, particularly in the peripheral economies. However, if this process is not disrupted, then by the end of the year we could see a glimpse of a more integrated Eurozone. Any resolution in how the UK stands relative to this process of integration within the Eurozone is very unlikely during 2013.
Fiscal austerity in Europe (as governments face pressure to reduce debt levels) will have a significant effect on businesses.
- The scale of policy measures that are being implemented across Europe is unprecedented. Each such measure will impact on businesses in its own way: on the one hand, business will be affected directly through changes in regulation, their tax burden and due to changes in the demand for their products by consumers; on the other hand, businesses will also be affected through the effects of policy measures on consumer spending power, wage expectations and the impact of policy on financial sector lending.
For more information, read PwC Paying Europe’s Debts December 2012 edition