9 October 2001, 12:06 EU's Solbes sees FY EU GDP growth 'significantly' below.
FRANKFURT (FWN) - EU economic and monetary affairs commissioner Pedro Solbes
said EU GDP growth this year will be significantly under 2 pct and GDP may even
contract in the third quarter.
Speaking in an interview with the Frankfurter Allgemeine Zeitung, Solbes
said the EU does not see a prolonged recession either in theEU or the euro
zone, but it no longer excludes the possibility that GDP may shrink in the
third quarter.
A slight recovery is expected in the fourth quarter, but overall growth
this
year will be "significantly less than 2 pct", said Solbes.
The EU has previously forecast growth of 2.5 pct this year and potential
growth for the euro zone is defined by the European Central Bank at 2-2.5 pct.
"This is certainly one of the most uncertain economic moments of the past
30
years," Solbes told the paper.
He said it is very difficult to estimate the knock-on effect on EU
countries from the recent terrorist attacks in the US.
Even before the attacks however, a survey for the commission had showed
that
consumer and corporate confidence in the EU had fallen to its lowest level for
four years, Solbes said.
He added the considerable growth divergences in the EU will continue, with
Germany expected to bring up the rear this year.
"Germany is certainly a problem," Solbes said, noting that Europe's largest
economy has failed to tackle problems in its labour market and social security
system with sufficient dynamism.
The commissioner said Germany is partly to blame for the EU's low
employment
rates, as it does not provide sufficient people for the labour market.
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