Accessibility/Mobile Features
Skip Navigation
Skip to Content
Editorial News
Classified Sites

The Canadian Press - ONLINE EDITION

EU forecasts the bloc's economic growth will help lower the high unemployment rate faster

BRUSSELS - The ongoing economic recovery across Europe should help unemployment fall faster than previously expected, according to a new EU forecast released Monday.

In its spring forecast, the EU's executive Commission said the economic recovery is spreading across the 28-country bloc and that should help reduce the ranks of the 25.7 million unemployed.

Among the 18 EU countries sharing the euro currency, the Commission expects unemployment to drop to 11.8 per cent this year and 11.4 per cent in 2015. Those predictions are lower than those it made in February, when it foresaw unemployment at 12 per cent this year and 11.7 per cent next.

"The recovery is gaining traction," said Siim Kallas, the EU Commissioner in charge of economic affairs. "Importantly, the employment situation has started improving."

However, the recovery isn't expected to prompt upward price pressures in the eurozone. The Commission lowered its inflation forecast for the eurozone for this year from 1 per cent to 0.8 per cent, which is well below the European Central Bank's target of close to but below 2 per cent.

Inflation dropped dramatically over the past year or so because of high unemployment, government spending cuts and tight credit conditions, leading economists to warn about the risk of outright falling prices, or deflation, which could dent growth.

The ECB will hold its next rate-setting meeting Thursday, but many analysts say the bank remains unlikely to further lower its benchmark interest rate or announce other counter-measures like large-scale asset purchases to boost inflation.

Low inflation was one of the threats to the economy noted by the Commission. It also cautioned over tensions stemming from the escalating crisis in Ukraine, just east of its border.

The eurozone emerged from recession last year following a protracted financial crisis that saw several countries requiring a bailout to avoid bankruptcy. Unemployment across the eurozone reached an all-time high of 12 per cent last year.

The Commission continues to expect the economy of the eurozone, which has a population of about 330 million, to grow by 1.2 per cent this year. In 2015, however, the Commission slightly revised downward its forecast by 0.1 percentage point to 1.7 per cent.

The U.S. economy, in turn, is expected to grow by 2.9 per cent this year and 3.2 per cent next year. The unemployment rate sank to 6.3 per cent last month.

For the wider EU, which includes members like Britain and Poland that don't use the euro, the Commission expects unemployment to fall more rapidly, with the jobless rate 10.5 per cent this year and 10.1 per cent in 2015. Those are down on the February projections of 10.7 per cent and 10.4 per cent respectively.

Overall growth in the EU, which is the world's biggest economy, is expected to be 1.6 per cent this year and 2 per cent in 2015.


Follow Juergen Baetz on Twitter at

  • Rate this Rate This Star Icon
  • This article has not yet been rated.
  • We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high. If you thought it was well written, do the same. If it doesn’t meet your standards, mark it accordingly.

    You can also register and/or login to the site and join the conversation by leaving a comment.

    Rate it yourself by rolling over the stars and clicking when you reach your desired rating. We want you to tell us what you think of our articles. If the story moves you, compels you to act or tells you something you didn’t know, mark it high.

Sort by: Newest to Oldest | Oldest to Newest | Most Popular 0 Commentscomment icon

You can comment on most stories on You can also agree or disagree with other comments. All you need to do is register and/or login and you can join the conversation and give your feedback.

There are no comments at the moment. Be the first to post a comment below.

Post Your Commentcomment icon

  • You have characters left

The Brandon Sun does not necessarily endorse any of the views posted. Comments are moderated before publication. By submitting your comment, you agree to our Terms and Conditions. New to commenting? Check out our Frequently Asked Questions.


Make text: Larger | Smaller

Brandon Sun Business Directory
Sudden Surge: Flood of 2014
Opportunity Magazine — The Bakken
Why Not Minot?
Welcome to Winnipeg

Social Media

Canadian Mortgage Rates