Commission revises down economic forecast

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The European Commission has projected weak economic growth for the rest of this year in the eurozone.

Unveiling its autumn economic forecast on Tuesday, the EU’s executive said that the 18-nation bloc will only grow 0.8%, a forecast below what was estimated earlier in the year. Growth is expected to rise slowly in 2015

“There is no single, and no simple answer. The economic recovery is clearly struggling to gather momentum in much of Europe. We believe that it is essential that all levels of government assume their responsibility and mobilise both demand- and supply-side policies to boost growth and employment,” EU Commissioner for Economic and Financial Affairs, Taxation and Customs Pierre Moscovici said.

“Country-specific factors are contributing to the weakness of economic activity in the EU, and the euro area in particular. Such factors include the deep-seated structural problems that were already well-known before the crisis, the public and private debt overhang; ongoing financial fragmentation related to the sovereign debt crisis and unfinished and uncertain reform agenda in some of our member states,” Commission Vice-President for Jobs, Growth, Investment and Competitiveness Jyrki Katainen stated.

According to the newly appointed commissioner, the EU sanctions imposed on Russia over the Ukrainian conflict, and a weaker global economy, are damaging business confidence.

Eurozone leaders are relying on a 300 billion euro investment fund to kick-start economic recovery, after newly elected Commission President Jean-Claude Juncker promised to unveil the plan in December.

“Our first priority now is to boost investment, to kick-start growth, and sustain it over time. We will be working at full speed, under the coordination by Vice-President Katainen, to put in place the 300bn investment plan announced by President Juncker,” Moscovici said.

The EU’s unemployment rate is likely to fall to 10%, the Commission said. But as for the eurozone, it will be significantly higher.

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