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European Union gross domestic product should grow in the second half of 2009, an economic report from the European Commission predicts.
The commission, the EU's executive arm, suggests that GDP in EU nations will grow incrementally in 2010 and slightly more in 2011. But employment declines will continue until late 2010, the commission's report says.
Key to an economic recovery - both in the EU and the U.S. - is a healthy banking sector, and if European banks' balance sheets are not purged of their toxic holdings, recovery from recession could be slower than the EC predicts. It also cautions that the weak labor market could hamper a recovery.
But the commission's market intervention kept the recession from growing deeper. "The exceptional monetary and fiscal measures put in place have not only prevented a systemic meltdown" but also strengthened the financial market, it says.
The EC's report cautioned against wild optimism, suggesting that the economy will recover to a "new equilibrium." EU nations' expensive stimulus efforts, in concert with "lower potential output," mean that "debt evolution is a source of concern for long-term sustainability."
By Benjamin Foster
EU in for a slow recovery, European Commission says
European Union gross domestic product should grow in the second half of 2009, an economic report from the European Commission predicts.The commission, the EU's executive arm, suggests that GDP in EU nations will grow incrementally in 2010 and slightly more in 2011. But employment declines will continue until late 2010, the commission's report says.
Key to an economic recovery - both in the EU and the U.S. - is a healthy banking sector, and if European banks' balance sheets are not purged of their toxic holdings, recovery from recession could be slower than the EC predicts. It also cautions that the weak labor market could hamper a recovery.
But the commission's market intervention kept the recession from growing deeper. "The exceptional monetary and fiscal measures put in place have not only prevented a systemic meltdown" but also strengthened the financial market, it says.
The EC's report cautioned against wild optimism, suggesting that the economy will recover to a "new equilibrium." EU nations' expensive stimulus efforts, in concert with "lower potential output," mean that "debt evolution is a source of concern for long-term sustainability."
By Benjamin Foster
