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The Hague – Europe’s economic recovery is a fact. This emerged on Monday from a report emanating from the European Commission, “cabinet” of the European Union in Brussels.
This recovery may have positive effects for South Africa as well, the EU being South Africa’s largest trade partner.
The commission’s prognosis is that real GDP growth will increase this year to 1.6% in the EU and 1.2% in the eurozone. This after six years of economic decline or, at the best, stagnation.
There is, however, a rider. The forecast rests on the assumption that the member states will indeed implement the reform measures agreed upon by the government leaders.
“The recovery has now taken hold,” said commission vice-president Siim Kallas at a press conference in Brussels.
He added that deficits have declined, investment is rebounding and, importantly, the employment situation has started improving.
“Continued reform efforts by member states and the EU itself are paying off. This ongoing structural change reminds me of the profound adjustment that the central and eastern European economies undertook in the 1990s and in subsequent years, linked to their joining the EU exactly 10 years ago.
“Their experience shows how important it is to embrace structural reforms early on and to stay the course, whatever challenges may be faced along the way. In this spirit, we must not lessen our efforts to create more jobs for Europeans and strengthen growth potential.”
An interesting aspect of the report is that the recovery is being driven by increased domestic demand. The contribution of net exports is likely to decrease.
Unemployment is expected to decrease next year to 10.1% in the EU and 11.4% in the eurozone.
Inflation will remain extremely low, both in the EU (1.0% this year and 1.5% in 2015) and in the eurozone (0.8% and 1.2% respectively).
Germany, regarded as Europe’s main economic engine, will probably grow by more than 2% this year and again next year.
Unemployment will reach 5.1%, the lowest for many years (in the 1990s it hovered around 9%). For the first time in eons, the German budget will be a balanced one.
France, another strong economy, will slowly recover from stagnation and grow by 1% this year. Labour cost reductions may boost the recovery, the report states.
Outside Europe there are positive forecasts for the USA, Japan and China, while Russian growth is thought to be “subdued” amid “geopolitical tensions” – a reference to the country’s role in the Krim and the Ukraine.
- Fin24
This recovery may have positive effects for South Africa as well, the EU being South Africa’s largest trade partner.
The commission’s prognosis is that real GDP growth will increase this year to 1.6% in the EU and 1.2% in the eurozone. This after six years of economic decline or, at the best, stagnation.
There is, however, a rider. The forecast rests on the assumption that the member states will indeed implement the reform measures agreed upon by the government leaders.
“The recovery has now taken hold,” said commission vice-president Siim Kallas at a press conference in Brussels.
He added that deficits have declined, investment is rebounding and, importantly, the employment situation has started improving.
“Continued reform efforts by member states and the EU itself are paying off. This ongoing structural change reminds me of the profound adjustment that the central and eastern European economies undertook in the 1990s and in subsequent years, linked to their joining the EU exactly 10 years ago.
“Their experience shows how important it is to embrace structural reforms early on and to stay the course, whatever challenges may be faced along the way. In this spirit, we must not lessen our efforts to create more jobs for Europeans and strengthen growth potential.”
An interesting aspect of the report is that the recovery is being driven by increased domestic demand. The contribution of net exports is likely to decrease.
Unemployment is expected to decrease next year to 10.1% in the EU and 11.4% in the eurozone.
Inflation will remain extremely low, both in the EU (1.0% this year and 1.5% in 2015) and in the eurozone (0.8% and 1.2% respectively).
Germany, regarded as Europe’s main economic engine, will probably grow by more than 2% this year and again next year.
Unemployment will reach 5.1%, the lowest for many years (in the 1990s it hovered around 9%). For the first time in eons, the German budget will be a balanced one.
France, another strong economy, will slowly recover from stagnation and grow by 1% this year. Labour cost reductions may boost the recovery, the report states.
Outside Europe there are positive forecasts for the USA, Japan and China, while Russian growth is thought to be “subdued” amid “geopolitical tensions” – a reference to the country’s role in the Krim and the Ukraine.
- Fin24
