The main message for European policymakers from the IMK economic forecast last week – available in German here
– is that while there are strong grounds to hope for the best, concrete
steps need to be taken to avoid the worst. Let us start with the good
news and then ponder the risks, before recommending appropriate
policies.
The European economy appears finally to have turned the corner. In the euro area the recession was overcome in the course of last year and employment has bottomed out. The IMK expects growth of 1% and 1.7% in the euro area in the current and coming year respectively. Thanks to faster growth in the UK, Poland and some smaller economies outside the common currency area, the EU as a whole will grow rather faster.
Even in the crisis countries the signs are at last encouraging. Greece will continue to contract, on annual averages, this year but a substantial rebound is expected in 2015 (3.2%). Spain and Portugal will grow slightly below and rather above the euro area averages this and next year; unemployment is already falling, in Portugal rapidly. Meanwhile Italy continues to lag, stagnating this year and with sub-par growth in 2015 (0.8%).
Read more: The European Economy Spring 2014
The European economy appears finally to have turned the corner. In the euro area the recession was overcome in the course of last year and employment has bottomed out. The IMK expects growth of 1% and 1.7% in the euro area in the current and coming year respectively. Thanks to faster growth in the UK, Poland and some smaller economies outside the common currency area, the EU as a whole will grow rather faster.
Even in the crisis countries the signs are at last encouraging. Greece will continue to contract, on annual averages, this year but a substantial rebound is expected in 2015 (3.2%). Spain and Portugal will grow slightly below and rather above the euro area averages this and next year; unemployment is already falling, in Portugal rapidly. Meanwhile Italy continues to lag, stagnating this year and with sub-par growth in 2015 (0.8%).
Read more: The European Economy Spring 2014
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