BY FRANCESCO CANEPA AND CHRISTOPH STEITZ
FRANKFURT- US President Donald Trump’s erratic policymaking has given Europe an unexpected spur to action, but any sense of “Europhoria” about the region’s chances of turning this moment into a longer-lasting revival is likely premature.
Trump’s threats on tariffs and questioning of America’s future security role in Europe have drawn an energetic response, perhaps best symbolized by Germany’s plans to spend hundreds of billions of euros on defense and infrastructure.
Some European companies are becoming more optimistic about sales, while growth projections for the euro zone economy have been upgraded. The euro has risen and investors are ditching US stocks for their long-neglected European counterparts.
Yet while some analyst notes now include the phrase “Make Europe Great Again” – a play on Trump’s MAGA slogan – the surge in optimism ignores Europe’s unresolved problems: high energy costs, a fragmented internal market, and looming tariffs from its biggest customer, the United States.
“Is the Europhoriajustified?,” asked Holger Schmieding, an economist at German bank Berenberg. “The more positive outlook for Europe makes sense. But as usual, the sudden swing may be a little overdone in some cases.”
Euro zone shares have risen 12 percent since Trump’s inauguration on January 20, while US stocks have fallen by 6.7 percent.
US consumers and investors have also turned much more pessimistic than their Europeancounterparts. Economists polled by Reuters have upgraded their 2026 growth forecasts for the euro zone for the first time in nearly a year, to 1.3 percent from 1.2 percent. — Reuters
