The recent decisions made by the guardians of the eurozone have dealt the most significant blow to the currency since its inception. The combination of higher interest rates and government spending constraints has the potential to hinder economic activity and raise the risk of a detrimental recession. An analysis conducted by Bloomberg Economics indicates that the negative consequences from last year’s increase in borrowing costs will reach its peak in 2024, impacting the economy at a rate of 3.8%. Depending on energy prices and the discontinuation of support measures, this blow could potentially escalate to 5%.
