Growth of EU economy stopped, EU countries can enter new phase of recession - European Commission

USSELS. November 11. KAZINFORM /Dimash Syzdykov/ The growth of the EU economy has stopped, the countries of the European Union can enter a new phase of recession. Olli Rehn, European Commissioner for Economic and Monetary Affairs made it public, introducing the Autumn forecast 2011-13: Growth at a standstill.

As Commission Vice-President for Economic and Monetary Affairs Olli Rehn said, "growth has stalled in Europe, and there is a risk of a new recession. While jobs are increasing in some member states, no real improvement is forecast in the unemployment situation in the EU as a whole. The key for the resumption of growth and job creation is restoring confidence in fiscal sustainability and in the financial system and speeding up reforms to enhance Europe's growth potential."

In O.Rehn's opinion, sharply deteriorated confidence is affecting investment and consumption, weakening global growth is holding back exports, and urgent fiscal consolidation is weighing on domestic demand.

According to him, is particular, GDP in the EU is now projected to stagnate until well into 2012. Growth for the whole of 2012 is forecast at about ½%. By 2013, a return to slow growth of about 1½% is expected. No real improvements are projected for labour markets, and unemployment is forecast to remain at the current high level of around 9½%.

Inflation is set to return below 2% over the coming quarters. Fiscal consolidation is forecast to progress with public deficits set to decline to just above 3% by 2013 under an assumption of unchanged policies.