All change in the eurozone

The combination of these measures created a sharp downward pressure on the Euro exchange rate against virtually every currency.

These ECB members finally built up enough courage to stand up to Germany which had hitherto vetoed all measures to ease the burden of the austerity measures in place. The new policy of ‘quantitative easing’ will inject a significant amount of money into the Eurozone economies to help generate investments and consumer confidence and as a result economic growth rather than stagnation. All of which should help to avoid deflation.

Without the ECB measures, the Eurozone was headed towards another recession, all self-inflicted and totally unnecessary. Unemployment was rising again and the spectre of deflation, causing falling prices but without generating demand, caused the World Bank to scale back its growth forecasts for the Eurozone even with the dramatic decline in oil prices.

Then Greece received a new, leftwing government totally at odds with austerity and the German medicine imposed upon it for the last few years. The pain was palpable and even with an improved budget balance, economic growth was not there indicating that the medicine was poisonous rather than beneficial. Austerity was coming off the list of options for saving Greece.

What does all of this mean for the port industry and its customers? Firstly, it should mean a healthier outlook for 2015, rather than facing lower growth in cargo volumes. This will help to increase the number of ship calls despite the growth in vessel sizes.

Secondly, the seeming death of austerity will help the consumer to spend more money, not unlike in the US, which will also create more consumer goods growth.

Perhaps in a year’s time we will be able to look back and wonder why austerity was ever introduced. Ask an economist to help clarify and you will get at least five different opinions.