Press Release: Spring forecasts 2009-2010: a tough 2009, but EU economy set to stabilise as support measures take effect

In the Commission's spring forecast, GDP in the European Union is projected to fall by 4% this year and to broadly stabilise in 2010. The main factors behind the recession are the worsening of the global financial crisis, a sharp contraction in world trade and ongoing housing market corrections in some economies. However, with the impact of fiscal and monetary stimulus measures kicking in, growth is expected to regain some momentum in the course of 2010. Labour markets will be severely affected, with the unemployment rate expected to increase to 11% in the EU in 2010. The public deficit is also projected to rise sharply, to 7¼% of GDP in 2010, reflecting both the slowdown and the discretionary measures taken to support the economy, in line with the European Recovery Plan proposed by the Commission.

Euiropean Commission: MEMO/09/214: Preparation of Eurogroup and Economic and Finance Ministers Council, Brussels, 4 and 5 May 2009 http://europa.eu/rapid/pressReleasesAction.do?reference=MEMO/09/214&format=HTML&aged=0&language=EN&guiLanguage=en

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