The European Union estimates that the economy of the 17 countries
that use the euro is in recession in the wake of a debt crisis that has
prompted savage spending cuts and a jump in unemployment to record
highs.
The European Commission, the executive arm of the EU, forecasts
that the eurozone economy will contract by 0.3 percent in 2012 and grow
by 1 percent next year. Its prediction for 2012 is far weaker than the
one it gave last November, when it predicted growth of 0.5 percent. A
year ago it was predicting growth of 1.8 percent.
Friday's forecasts provide clear evidence of the impact of
Europe's debt crisis on the eurozone economy over the past year as
governments have struggled to introduce deficit-reduction measures and
business and consumer confidence has taken a dive.
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