Several factors have been underpinning the relatively modest (compared to the length of the stagnation period) recovery in the European economy and the increases in income inequality. In what follows, we examine the components of aggregate demand and some of the developments that have been driving them, not least the developments in macroeconomic policies, in order to illustrate the channels through which aggregate demand could be strengthened. Compared to the most recent recoveries, in 1996–2000 and 2003–2006, the contribution of investment and of private and public consumption has been relatively weak in the present recovery, whereas for an economy as large as the EU, net exports have been making sizeable contributions to GDP growth, especially since 2010. Figure 1.13 shows the contribution of different components of aggregate demand to yearly real GDP growth from 1996 to 2018 for the EU. The euro area presents an almost identical picture.
more information in Benchmarking Working Europe 2019 chapter 1 'Macroeconomic developments in Europe: tackling the growth, inequality and climate change challenges'