Posted on 07/18/2005 7:52:56 PM PDT by Righty_McRight
BRUSSELS, Belgium - High oil prices and slowing global manufacturing will keep euro-zone growth disappointing in the second quarter, the European Union said Monday.
The European Commission's quarterly report on the euro area said its spring forecast of 1.6 percent growth this year may prove "a little optimistic."
It said it believes the euro-zone economy will pick up in the second half of 2005 as the global economy recovers and exporters benefit from a more favorable euro-dollar exchange rate.
However, the commission warned that EU countries urgently needed to reform labor markets and increase competition for products to tackle entrenched differences in national growth rates in the euro area. In particular, it said wages need to become more responsive to economic developments.
EU Economic and Monetary Affairs Commissioner Joaquin Almunia said coming to grips with differences in growth was a priority to save national economies from long periods of low growth.
"This is unwelcome as it could trigger a damaging spiral of falling potential growth due to weak investment, eroding skills and rising levels of economic inactivity among the working age population," he wrote in the report's editorial.
Annual inflation in the euro zone for June increased to 2.1 percent from 2 percent in May, but down compared to 2.4 percent a year earlier, the EU statistical agency Eurostat said Monday.
Annual inflation for the entire EU was steady at 2 percent in June.
The highest increases over the last 12 months were in four new EU members: Latvia, 7 percent; Hungary, 5 percent; Slovakia, 4.5 percent; and Estonia, 4.1 percent.
Such bad luck! Kinda reminds me of all that terrible weather that used to afflict and curtail Soviet grain harvests. Every year the weather was worse than the last!
I wonder if the disappointing growth might have anything to do with all that socialism they have over there?
Muslims uber Alles. They will need Lebensraum.
Maybe they could draft Jimmy Carter to straighten out their economy.
Old Europe's economy has been moribund for years. This has nothing to do with oil prices and global manufacturing and everything to do with the strident protectionist policies of the socialist nanny states.
As an eye opening contrast just look at the growth rates of new Europe: The highest increases over the last 12 months were in four new EU members: Latvia, 7 percent; Hungary, 5 percent; Slovakia, 4.5 percent; and Estonia, 4.1 percent. These countries have embraced free markets and reduced barriers to trade. I think it's great that they are schooling the elites on how economic growth is achieved.
... oh and Chirac will start banging his shoe on the podium promising to bury us ...
Sorry for the mistake.
If it weren't for the coattails of the American economy they would have no growth at all.
That should be a relief to Poland.
Thanks for the correction. Late night......
GDP growth by new Europe still far exceeds that of old Europe. Here are their projected real GDP growth rates for 2004: Latvia 6.8%; Lithuania 7.1%; Estonia 4.8%; Croatia 4.5%;Slovakia 3.9%; Poland 3.6% - vs. the overly optimistic 1.6% growth estimated for all the EU.
True, they have much smaller bases to work from but their growth rates were enough to cause fear among the old members and helped defeat the proposed constitution.
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