With Key Elections Approaching, Watch For European Fiscal Accommodation

European fiscal accommodation is expected to accompany GDP growth as spread tightening and populist elections are in view.

With upcoming general elections in Germany, France and Italy, and a tide of populism gripping both the U.S. and European political theater, fiscal policy in the Eurozone is expected to loosen. The change in approach from austerity under Troika programs will have a material impact on Gross Domestic Product growth in the region, a June 3 Goldman Sachs report predicted.

European Fiscal Accommodation: Rise of political populism tied to tight financial conditions

Fiscal policy had been tight in the Eurozone from 2011 to 2013 as austerity. Reducing sovereign...