Europe’s economy has reached a turning point, according to the European Commission.
Presenting his Autumn economic forecast on Tuesday , EU commissioner Olli Rehn said that a slow economic recovery is expected over the next two years, but unemployment will remain high.
The Commission expects economic growth in 2014 to hit 1.1% in the euro area and 1.4% in the Union as a whole. In 2015, growth is expected to be 1.7% in the euro zone and almost 2% in the EU.
“We are seeing clear signs of an economic turnaround but growth will pick up only gradually and will translate into jobs only with lag and that’s why we cannot yet declare victory and we must not fall into the trap of complacency”, said EU Commissioner for Economic and Monetary Affairs Olli Rehn.
Rehn also warned that employment is unlikely to recover quickly.
According to the forecasts, eurozone unemployment will remain at over 12% this year and next. In crisis-hit countries like Spain and Greece, it will stay above 26%.
‘The economies of Italy and Spain will contract this year in annual terms but for Spain, growth is expected to have returned in the third quarter and for Italy this is expected in the fourth quarter of this year. In both countries large needs of adjustment still remain which in Spain is visible in the unbearably high unemployment rate’, said EU Commissioner for Economic and Monetary Affairs Olli Rehn.
Rehn said that austerity has been the basis for recovery in Europe and added that further fiscal reforms will be needed.
“Further decisive action to boost sustainable growth and job creation will continue to be necessary in Europe, said EU Commissioner for Economic and Monetary Affairs Olli Rehn.
The European Commission publishes its economic forecasts three times a year.