Following the recession that marked 2012, the European Union (UN) economy is expected to stabilise in the first half of 2013, according to a spring forecast released by the European Commission on Friday.

The Commission expects GDP growth in the EU to turn positive in the second half of the year before gaining momentum in 2014. The projected GDP growth in 2013 and 2014 are minus 0.1 percent and 1.4 percent.

The report attributes low growth rates in both areas to constrained domestic demand due to a number of impediments, which are typical of the aftermath of deep financial crises.

However, external demand will be the main locomotive for growth, according to the Commission. "The headwinds on private consumption and investment are expected to abate gradually, making way for a modest domestically sustained recovery next year," said the report.

Olli Rehn, Commission Vice-President for Economic and Monetary Affairs, underlined importance of fostering growth and employment under current circumstances. "In view of the protracted recession, we must do whatever it takes to overcome the unemployment crisis in Europe. The EU's policy mix is focused on sustainable growth and job creation," he said.

"Fiscal consolidation is continuing, but its pace is slowing down. In parallel, structural reforms must be intensified to unlock growth in Europe," Rehn added. Endi

Go to Forum >>0 Comment(s)