EU to recover at tepid pace, but strong euro a headache | Business| Economy and finance news from a German perspective | DW | 05.11.2013
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EU to recover at tepid pace, but strong euro a headache

The European Commission has said the 28-nation bloc looks unlikely to recover quickly from years of economic crisis. In its autumn outlook, the EU executive expects full-year growth to be flat at best.

Presenting its autumn outlook in Brussels, the EU executive on Tuesday warned economic recovery in the bloc would still be volatile while continuing into the second half of the current year.

The European Commission said it expected the region's economy to expand by 0.5 percent throughout the second half of 2013, but added that growth would be flat for the whole year.

It also predicted ongoing recovery from recession for the 17 nations using the euro. It added, though, that growth would be posted only in quarterly terms, while for 2013 as a whole the eurozone's economy would dip by 0.4 percent before gaining 1.1 percent in 2014.

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The EU executive statedthat growth would not be substantial enough to lead to fundamental changes in the euro area's employment situation, saying the zone's overall jobless rate would remain at a record-high 12.2 percent this year and next.

The outlook pointed out that France and Spain were unlikely to get on top of their public deficit problems. It expected Paris to miss an EU deadline to bring its deficit below 3 percent of gross domestic product by 2015. Madrid for its part could see its deficit fall to 5.9 percent next year, but a renewed rise to 6.6 percent would set in in 2015, the Commission predicted.

Brussels noted that the euro would appreciate at a fast pace in 2014, too, meaning the stronger currency would make exports more expensive and could dampen the bloc's aspirations to crank up the economy.

hg/tj (dpa, Reuters, AP)

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