The announcement on November 4 of Europe’s autumn economic growth forecasts was the first task for the new European Commission presided by Jean-Claude Juncker. The new Commission which took office on schedule (a first since 1994) on November 1 offered a more pessimistic forecast than had been made last spring. The new euro-zone growth forecast for this year is 0.8% and only 1.7% for 2016. The larger Eurozone economies of Germany, France and Italy are stagnating whilst Great Britain experienced healthy growth. To kick-start growth the European Commission is focusing on a 300 billion euro investment plan as promised by the Commission president, the content of which will be revealed before Christmas, while concurrently Germany is calling for stricter European controls on national budgets.
A snapshot of a stagnating euro-zone. Growth in the 18 country Eurozone is not expected to exceed 0.8% this year. Similarly, growth is not expected to reach 1.7% until 2016, which is one year later than previously expected, announced Jyrki Katainen, the vice-president in charge of Growth and Employment. He cited, amongst the reasons for the slowdown, the levels of public and private debt and political tensions in Ukraine and the Middle East. Even if the situation varies from country to country the three main Eurozone economies are all worrying.
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