BYMOF - Climate Change Is Ironically Emerging As Europe's Only Positive Economic Factor
2024-02-14 05:37:35 ET
Summary
- The EU economy experienced near-zero economic growth in 2023, and more of the same seems to be on the way this year.
- Metrics that make up GDP, such as industrial production and retail sales, and their underlying factors suggest that the degrowth mode has become institutionalized.
- The decades-old emissions-cutting quest has gradually weakened the EU economically, while the Ukraine war brought additional strain in the form of an energy crisis.
- Recent EU agreements suggest that environmental policy damage to the economy is about to get ramped up, while the global energy market dynamics suggest the energy insecurity crisis is permanent.
- Investors should consider caution when looking at European investment opportunities and should be mindful of the growing threat to the EU's economy. The best thing that can be said about anything that the EU economy has going for it is the warmer winters that reduce household natural gas demand.
Investment thesis: Last year was a horrible year for Europe's economy. It experienced near zero economic growth for all of 2023, and this year seems to bring more of the same. The IMF recently lowered its projections for the EU, and I am sure more downward revisions are coming. There is simply nothing to drive the EU economy forward. Things might look even worse if it were not for warmer winters, ironically arguably due to climate change, which helped Europe to drastically reduce natural gas consumption since 2022, thus avoiding the risk of having to disrupt and further destroy industrial demand....
Climate Change Is Ironically Emerging As Europe's Only Positive Economic Factor