Protectionism as a brake on the economy

Following an expected cyclical recovery of growth in the euro area, the new US import tariffs and possible retaliatory measures have triggered an abrupt downward revision to the growth outlook. We now expect the euro area to grow by only 0.8 percent in 2025 overall. Growth in the euro area should be nurtured by an appropriate monetary stance of the ECB and more active fiscal policy in some member states with higher defence and infrastructure needs.