Widening gap between north and south threatens Eurozone, BCSC hears

Slower economic recovery, increased unemployment and a more severe decline in lending in Southern Europe are widening the gulf between Northern and Southern Europe, a leading economist told a meeting of the British Council of Shopping Centers (BCSC) in London on Wednesday.

Economics professor Andrea Boltho said that the rift was part of ‘an extremely worrying set of circumstances which could lead to a breakdown’ in the Eurozone.

Addressing a panel at the event, Boltho said: ‘Debt in Southern Europe is a lot higher than in the North, and markets punish Southern Europe with higher interest rates. Competitiveness in the South of Europe has plunged. In the first few years of the Eurozone the South was growing as competitively as the North, but now a big gap is emerging.’

Boltho added that while Northern Europe as a whole was performing far better than the South, the UK is showing the strongest signs of recovery, largely down to strong consumer performance.

He added: ‘Private consumption is growing very rapidly in the UK, but in the Eurozone it is still falling. Households are in much better shape in the UK because employments rates are more stable.’
Last week Boltho told delegates at the annual conference of the European Public Real Estate Association (EPRA) in Paris that interest rates are normalising again and that rising rates will be the story for the next three years.

Click on the link below to read the full report on the EPRA conference.