The eurozone economy grew by 0.4% in the first quarter of 2025 compared to the previous three months, according to a report by the European Union’s statistical office, which presented preliminary data on Wednesday.
Eurostat noted that the data was distorted by 3.2% growth in Ireland, which was due to the activities of large foreign companies based there for tax reasons. The GDP of the union’s largest economy, Germany, grew by 0.2%, France by 0.1% and Italy by 0.3%. Excluding Ireland, the bloc’s first-quarter figure would have been close to the expected 0.2%, the agency noted.
Meanwhile, the outlook for the eurozone has deteriorated significantly: some of Europe’s largest companies, such as Volkswagen and Mercedes-Benz, have recently warned that US tariffs will affect their revenues, reduce sales and may cut investment. The European Central Bank has previously stated that, in addition to the trade war, financial market instability caused by US policy and a general deterioration in sentiment will hold back the bloc’s economic growth.
At the same time, the EU as a whole had expected economic growth of less than 1% — even before Trump announced the tariffs. Any further major damage would bring the bloc closer to recession, according to the European Union. Nevertheless, most economists and politicians are confident that the negative trend will have a greater impact on the US than on other economies, which will create an incentive for the Trump administration to change its approach.
