An acceleration of investment is essential.” DIRE INDICATORS

“This is not specific to the most vulnerable countries. “Investment is still considerably lower than the level it was at before the crisis,” said Moscovici. The European Commission’s new president, Jean-Claude Juncker, has promised to unveil the plan in December, but economists warn the programme will not be enough. Reacting to the Commission’s overall forecasts, French Finance Minister Michel Sapin said in a statement issued to Reuters that the crucial question was “how to rediscover, as quickly as possible, more growth and jobs”.Įuro zone leaders are putting their faith in a proposed 300 billion euro fund to invest in projects to revive the economy. Rather than falling, like virtually everywhere else in the euro zone, the French deficit is to grow steadily to 4.7 percent of gross domestic product in 2016 from 4.1 percent in 2013, assuming the country takes no further steps.įrance has promised to bring the deficit down to the EU’s 3 percent of GDP limit in 2017, but that is the year of a presidential election, making dramatic spending cuts unlikely. Indebted countries like Italy and France have little public money for investing, something that was highlighted by the Commission’s Autumn projections for France’s budget deficit. Germany has become increasingly isolated for its insistence on balancing its budget, as the weakness of the 18-country euro zone, which generates a fifth of world economic output, holds back a broader global revival led by the United States. “For the sake of Germany’s own economic strength in the future, it makes sense to invest.”īut he also said Germany alone would not be enough and that all EU countries needed to reform to boost growth. “Germany can play a significant role in stimulating the EU and euro area economy,” said Katainen, who is the EU’s new growth and jobs commissioner. German economic growth will be slower than the Commission had hoped, expanding 1.1 percent in 2015, not the 2 percent level the EU executive had foreseen in its Spring forecasts. “Today’s economic forecasts are good news because they confirm that the approach is wrong,” Gozi said in Berlin. Those calls were echoed by Italy’s undersecretary for European Affairs, Sandro Gozi, who said the Commission’s forecasts were proof that economic policies focusing heavily on budget rigour were misguided. Fellow European Commissioner Jyrki Katainen said Germany, Europe’s biggest economy, should invest more to help the recovery. The economic recovery is clearly struggling to gather momentum,” the EU’s economics commissioner, Pierre Moscovici, told a news conference.

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