Russia’s war in Ukraine caused the Eurozone economy to collapse.
European Central Bank (ECB) published a reviewwhere the bank’s experts compare the recovery of the euro area and the United States from the recession caused by the corona pandemic.
The recovery of the euro area has been generally weaker than that of the United States: while the real GDP of the euro area has grown by about 3 percent between the last quarter of 2019 and the last quarter of 2023, the growth in the United States was more than 8 percent.
There are many reasons for the differences in economic situations. One of them, however, is the war in Ukraine, which has affected the Eurozone economy much more than the US economy.
According to the ECB, the energy crisis caused by Russia’s major attack starting in 2022 and the rise in food prices have had a particularly heavy impact on the euro area economy. In addition, the weakening of consumer confidence weakened the economy of the euro area.
Due to these effects of the war, the competitiveness of the Eurozone weakened and people’s real incomes fell, the latter leading to a decrease in private consumption.
The United States, which is solidly self-sufficient in terms of energy, did not experience similar adversity. As the corona pandemic receded in the United States, consumption, especially the consumption of services, began to rise rapidly.