Brussels sees the light at the end of the tunnel


'The economic situation remains difficult this winter (...), but the light is now shining at the end of the tunnel,' said EU Economic Commissioner Paolo Gentiloni on Thursday. Containment, containment, health crisis and recessions have surpassed optimistic forecasts for the European economy for 2021. For all 19 countries in the euro area, the European Commission ultimately only expects growth of 3.8{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118} - instead of 4.2{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118} previously expected. Even if it is lower, this forecast is still in line with the growth of the European economy. This completely changes the situation compared to the past twelve months, in which analysts had seen unseen declines. For the European Union as a whole, the recession was -6.8{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118}.

Good news for 2022

Most of the good news, however, comes from the growth projections for the next year. Instead of the previously announced growth in European GDP of 3{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118}, the Commission is betting on growth of the same GDP of 3.9{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118}.

The end of the tunnel faster than expected

The introduction of vaccines, in particular, allows for a stronger recovery from summer and next year. Suddenly the EU economy should 'return to pre-crisis levels faster than expected in the second quarter of 2022,' said Paolo Gentiloni. The forecast for future thinning is based on the scenario of a reduction in these measures 'towards the end of the second quarter and more noticeably in the second half of the year, when the most vulnerable people and a growing proportion of the adult population will be affected.' have been vaccinated, 'said the European Commissioner for Economic Affairs.

Variable recovery depending on the country

'However, the pace of recovery will vary significantly between countries,' said the commission. In fact, some have been more severely affected by the pandemic or have economies more dependent on tourism, such as Spain, Portugal and Greece. Brussels expects growth of 5.5{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118} (-0.3 points) in France in 2021, then 4.4{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118} (+1.3 points) in 2022 after -8.3{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118} in the previous year. For Germany, Europes largest economy, the Commission expects GDP to rise by 3.2{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118} this year and 3.1{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118} next year after -5{7d3485657e94c2a51293ca186d4450b2f27c317aa7ee3509dac6c8bbf5461118} in 2020.

Another good surprise is 'not to be excluded'

Paolo Gentiloni stated that 'a good surprise should not be ruled out as these figures do not take into account the massive economic fund of 750 billion euros, the first payments of which are expected in the second half of the year'. On the other hand, they contain a Brexit effect of 0.5 growth points by the end of 2022, which is less than expected thanks to the conclusion of a trade agreement between the EU and the UK.

Continue to help as long as necessary

However, the EU Economic Commissioner also wanted to emphasize that 'the economic difficulties will not end on December 31, nor will the flexibility and help of the European Union'.