Ireland posted the strongest quarterly expansion in Europe in the second quarter of 2026, at about 3.9%, while Lithuania grew by 1.7% and Sweden by 1.4%, according to the figures released on Thursday. The eurozone economy grew by 0.4% in the quarter and the broader European Union by 0.5%, with annual growth reaching 1.0% in the euro area and 1.2% across the EU. Brussels and the national capitals will call that resilience. For the people paying higher energy bills, it looks more like the system keeping itself upright while the costs land below.
Who Gets the Growth
Ireland’s surge came from accounting operations by multinationals, including major pharmaceutical companies and tech giants, that have chosen the country as their European base to benefit from low corporate tax rates. That is the EU single market in practice: capital moves where the tax regime suits it, and the numbers are then counted as national success. Portugal recorded 0.8% quarterly growth, Spain 0.7%, Germany 0.2%, France 0.2% and Italy 0.2%, while Belgium and Austria stagnated. The bloc’s growth map still reads like a hierarchy, with some places serving as platforms for corporate bookkeeping and others left to absorb the drag.
Germany’s economy slowed to 0.2% in the second quarter after expanding by 0.4% in the first quarter. France returned to growth after contracting in the previous quarter. Spain continued to outperform the eurozone’s largest economies, and its strong household spending, resilient exports, fiscal support and growing renewable energy capacity were cited as helping cushion consumers from rising energy prices. The language is neat. The reality is less polished: households are told to absorb shocks, while fiscal support and market structures decide who gets protected and who gets squeezed.
Energy Shock, Managed from Above
The region was described as resilient despite rising energy prices and geopolitical uncertainty. That resilience was also said to include the eurozone economy weathering the impact of the US-Iran war better than feared. Andrew Kenningham, chief Europe economist for Capital Economics, said: "The continued steady growth of the eurozone economy... shows that households and businesses have not pared back their spending much due to the Iran war." He added: "We think the economy will continue growing steadily in the second half of the year," and said: "All told, the data published today suggest that the economy is weathering the Iran war quite well."
Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics, said: "The Eurozone economy blew past the consensus in Q2 and was even stronger than our above-consensus forecast, despite the energy price shock triggered by the US-Iran war." He said the data left "a picture of resilience in the first half of the year," and added that "Net exports were the main driver of Q2 GDP growth, while consumption slowed and investment fell." He also said, "the rebound in GDP growth is encouraging, but the details are less so, particularly for investment."
That detail matters. Net exports carried the quarter, while consumption slowed and investment fell. The machinery of growth kept turning, but not evenly, and not for everyone. The economists can call that a rebound. Workers and tenants still live with the price of the shock.
The Brussels Machine Keeps Its Targets
Ankita Amajuri, Europe economist at Pantheon Macroeconomics, said: "The Spanish economy appears to have been unscathed by the energy shock so far." She said Italy was more vulnerable to the recent surge in energy prices than Spain. The European Central Bank last month cut its eurozone growth projection for this year to 0.8% from 0.9%. That cut sits underneath all the talk of resilience. The institutions keep revising their forecasts, the corporate base keeps shifting to wherever the tax rate is friendliest, and the rest of Europe is left to live inside the consequences.
The quarter’s numbers show a continent where growth is uneven, corporate accounting can inflate national performance, and energy shocks are absorbed first by households and businesses, not by the people who set the rules. The EU presents this as stability. The figures tell a harsher story.