Eurozone needs another year to grow moderately
Print Edition
THE fragile eurozone will need another year to reach even a modest level of economic growth, the European Commission said yesterday, revising down its forecasts and predicting more of the low inflation and high joblessness that plagues the bloc.
In its autumn estimates, the European Union executive arm said the eurozone’s economy would grow 0.8 percent this year, 1.1 percent next year and by 1.7 percent in 2016 — a level the commission said six months ago would be achieved next year. The delay in the upturn was due to drag on the economy from France and Italy.
“There is no single and simple answer. The economic recovery is clearly struggling to gather momentum,” the EU’s economics commissioner, Pierre Moscovic, told a news conference.
The eurozone’s faltering recovery from the financial crisis is becoming a wider concern as the currency bloc that generates a fifth of world economic output holds back a broader global revival led by the United States.
While the bloc’s hangover from its banking and debt crisis is largely to blame for its fragility, tensions with Russia over Ukraine and the economic sanctions that the EU has imposed on Moscow have also damaged business confidence and exports.
“The slowdown in Europe has occurred as the legacy of the global financial and economic crisis lingers,” said Marco Buti, the director general of the commission’s economics department.
“We see growth ... coming to a stop in Germany ... protracted stagnation in France and contraction in Italy,” he said in a statement on the forecasts for 2014 to 2016.
The commission data appear to avoid the relapse into recession that European Central Bank President Mario Draghi warned EU leaders of at a summit in Brussels last month, but despite a slowly improving trend, indicators remain dour.
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