Economy Set To Stabilise In 2010

The European Commission has forecast a 'tough' 2009 but is confident the EU economy will stabilise in 2010.

This will be the result of the supportive measures taken by governments and central banks.

Joaquin Almunia, Commissioner for Economy and Monetary Affairs said: "The European economy is in the midst of its deepest and most widespread recession in the post-war era. But the ambitious measures taken by governments and central banks in these exceptional circumstances are expected to put a floor under the fall in economic activity this year and enable a recovery next year.

"For this to happen we need to proceed rapidly with the cleaning up of the 'impaired assets' on bank balance sheets and recapitalise banks when appropriate."

All Member States have been affected by the recession, which started in the second quarter of 2008 and worsened towards the end of the year, although their prospects vary depending on their exposure to the financial crisis, housing market dynamics and degree of openness.

The European Commission predict that as financial markets stabilise, investor confidence will improve and both fiscal and monetary support will ease gradually to feed through to real activity. The fall in GDP is set to level off towards the end of this year and growth rates should turn modestly positive during 2010.  

To read a detailed report click here.

Last Updated: 14-05-2009 9:11:39 By Charlotte Jacques