The European Commission keeps trimming its forecasts for the EU economy’s growth this year. In early November the EC forecast it would expand by 2.4% in 2008, slowing from last year’s 2.9%, but with inflation and oil prices high the EU economic and monetary affairs commissioner Joaquin Almunia is now talking about growth of around 2%.
In an interview with EuroNews Almunia said: “Back in the summer, for a while, we thought that in 2008 the economies of Europe and the euro zone were going to continue to grow, but the growth would not be as strong as in 2007. Now, with the problems overseas, the sub-prime crisis in the United States and the effects that’s had on the financial markets which has made it harder to get credit, that creates more difficult conditions for the euro zone than we had a few months ago.”
The Slovenian Prime Minister Janez Jansa, whose country has just taken over the rotating presidency of the EU, also believes this year will be harder for the European Union economy due to financial market stress and surging oil and food prices.
At a news conference to outline Slovenia’s priorities during its six month presidency he said: “The problems of the financial markets will be discussed at a mid-March summit.” The gathering will consider what is needed to prevent such situations being repeated in the future.