Euro zone recession to continue until year-end
Economic output across the 17-state currency area set to shrink by 0.3pc this year after a 0.6pc contraction in 2012
The euro zone faces another full year of recession this year with unemployment likely to surge above the 20-million mark and French and Spanish state spending badly overshooting targets, the EU said on Friday.
Economic output across the 17-state currency area is set to shrink by 0.3 per cent this year after a 0.6-per cent contraction last year, the European Commission said.
That means that millions more people are likely to lose their jobs, with already record unemployment expected to rise markedly right into next year.
Millions more people are likely to lose their jobs, with already record unemployment expected to rise markedly right into next year
The EU’s winter economic forecast said there would not be a return to growth for the debt-laden monetary union – home to about 340 million people – until next year, when growth would return at a rate of 1.4-per cent from this low base.
As a result, the unemployment rate would hit 12.2 per cent for this year after 11.4 per cent last year – which left the number of people unemployed already at nearly 19 million.
Much of the attention was on France where the public deficit is set to be worse than expected this year and next year, veering up to 3.7 per cent of output this year and 3.9 per cent next year.
France, with the euro zone’s second-biggest economy, was due this year to get back within the European Union’s deficit ceiling of 3.0 per cent of output, and had been expected to show a deficit of 3.5 per cent of gross domestic product.