EU expects growth, but sees risks from energy

"Sizable" setbacks for EU economy should Russia cut oil, gas supplies.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  May 5, 2014 at 10:30 AM
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BRUSSELS, May 5 (UPI) -- The European economy is expected to recover, though any major disruption to oil and gas supplies would be a setback, the European Commission said Monday.

"Europe's economic recovery began a year ago and is expected to become broad-based across countries," Vice President of the European Commission Siim Kallas said in a speech Monday from Brussels.

The European Commission said it expects real gross domestic product to grow 1.6 percent this year and accelerate to 2 percent next year.

It warned, however, that economic recovery may depend in part on the ongoing crisis over Ukraine.

"Should further rising tensions with Russia lead to major disruptions in oil and gas supplies with a sharp rise in prices, the negative impact on a number of member states could be sizable," the EC warned.

Russian President Vladimir Putin warned European leaders last month the mounting debt in Ukraine was creating risks to European energy security.

Russia meets about a quarter of Europe's gas needs, though most of the supply runs through a Soviet-era transit network in Ukraine.

The European Commission said consumer spending is expected to be the main driver of economic growth, which should be supported by an increase in wages and lower energy prices.

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