Macroeconomic and financial environment
Macroeconomic and financial environment
After muted growth in the first quarter of 2021, the euro area economy grew strongly in the second and third quarters before a new Covid-19 variant started to weigh on growth towards the end of the year.
Appropriately supportive and mutually reinforcing economic policies have ensured effective macroeconomic stabilisation.
The Next Generation EU package, and in particular the Recovery and Resilience Facility within it, provides an opportunity to boost Europe’s growth potential. Over the next years, the effective implementation of reforms and investments under the Recovery and Resilience Facility will have a deep positive impact on the functioning of the euro area economies.
The outbreak of the war in Ukraine in February 2022 caused enormous geopolitical uncertainty and led to significant revisions of previous growth projections. The ultimate macroeconomic ramifications will depend on how the conflict unfolds and subsequent policy reactions.