The European Commission agrees this year the nations using Europe’s single currency will go into recession for the first time since the euro’s creation a decade ago. It believes the recession will be sharp and deep, but not long-lived.
“The risks that we identified in the November forecast have largely materialised and this has very negative consequences; first increases in budget deficits and, first and foremost, an increase in unemployment. According to our scenario with this forecast we should be able to achieve a gradual albeit modest recovery from the second half of this year,” said Monetary Affairs Commissioner Joaquin Almunia. Sixteen countries use the euro, a group now forecast to suffer a 1.9 percent economic contraction this year. Only in November it was thought the eurozone would just stay in the black in 2009.