Perspectives on Growth, Trade, and Social Agenda Expenditures in the Eurozone During the Rest of this Decade, With and Without the EU-US Transatlantic Trade and Investment Partnership (TTIP)

The Euro Zone countries have been experiencing slow growth of real GDP during the last decade. Without the increase in exports and national income estimated to result from a successful EU-US Transatlantic Trade and Investment Partnership (TTIP) now being negotiated, most members of the Eurozone would be unable to maintain the same share of government expenditures in gross domestic product and finance their social agenda in the same degree during the rest of this decade, as they did during the last decade. In this paper, we project the trends in GDP growth, national savings, household consumption and import demand for the seventeen countries that comprised the Eurozone in 2013. The exports of Eurozone members are determined by their share of the import demand of their most important trading partners and the rest of the world. We find that without TTIP, most members of the Eurozone would be unable to maintain the same share of government expenditures in gross domestic product and finance their social agenda in the same degree during the rest of this decade, as they did during the last decade. This conclusion would change with a successful TTIP. Even without a successful TTIP, however, most member nations would still be able to increase the absolute amount of government expenditure and social expenditures even as their shares decline.