The fastest stage of growth in the euro area looks to have passed, but momentum remains strong. Uncertainty is being fuelled by protectionism and Italy’s domestic economic policy.

Following the steep contraction caused by the financial crisis, there have been substantial differences in economic performance across the different countries in the euro area. Healthy economic structures appear to have facilitated a speedier recovery.

The favourable outlook for the global economy is overshadowed by the threat of protectionism. In the euro area growth has picked up. Some of this acceleration is on a sustainable basis, but long-term growth is likely to remain slower than pre-crisis growth.

How would a rapid but controlled restructuring of China’s economy or a sudden halt to debt-driven growth affect the Chinese and euro area economies?

During the last 10 years, the natural rate of interest in the advanced economies is estimated to have declined substantially. However, estimates of the level of the natural rate of interest are uncertain, which hampers the use of this interest rate as a monetary policy guide.

Increasing market uncertainty over the condition of banks in early 2016 was not due solely to concerns about global economic growth but also above all reflected concerns about banks’ non-performing loans and declining profitability amid low interest rates and subdued growth.

Since the financial crisis, consumer prices in Finland have been rising faster than in the euro area on average until recent months.

Euro area monetary policy has been highly accommodative, and the euro area economy is getting back on track. An abrupt halt in the Chinese economy would be the greatest risk to euro area growth. The articles were first published in Finnish on 24 September 2015.