European Commission projects slow, uneven recovery

BRUSSELS, Nov. 5 (UPI) -- The European Commission Tuesday released its economic forecasts that call for slow growth and continued disparity among eurozone countries.

Growth has begun, the Commission said, starting in the second half of the year. As such, gross domestic product growth is expected to end the year flat in the European Union and down 0.4 percent in the eurozone, which includes the 17 nations that share the euro as currency.

In 2014 and 2015, the Commission said, GDP growth should reach 1.4 percent and 1.9 percent, respectively, in the EU and 1.1 percent and 1.7 percent, respectively, in the eurozone.

The Commission said that economic conditions would continue to be shaped by "significant reforms and fiscal consolidation implemented in recent years," which should strengthen domestic demand.

Gains will be offset, however, at least in part, by "a weakened outlook for emerging market economies," the report said.

The commission also noted Europe's austerity-oriented response to the financial crisis would continue to hamper growth.

"The on-going balance sheet adjustment in some countries continues to weigh on investment and consumption," the commission said.

But the commission also said lowering debt would begin to put the economy on more solid ground.

"Given the progress made in recent years, the pace of fiscal consolidation is set to slow down over the forecast period. In 2014 and 2015, domestic demand is expected to be the main driver of growth," the commission said, adding increased consumption on the home front may be in order due to "a weakened outlook for EU exports to the rest of the world."

The commission said inflation would stay in check and high unemployment would subside slowly, dropping to 10.7 percent in the EU and 11.8 percent in the eurozone by 2015.

Currently, there is a gap of about 20 percentage points between the highest and lowest unemployment rates in Europe. The commission said the overall employment situation would improve, but "cross-country differences will remain very large."