RECESSION

Brussels forecasts negative growth for EU

The European Commission is likely to forecast a 2% contraction for the economy of the 27-nation bloc in 2009, according to German daily Die Welt. The new figure is susbstantially worse than the 0.2% growth predicted last November.

Advertising

AFP - The European Commission expects the EU's economy to shrink by two percent this year, Germany's Die Welt daily reported on Monday, citing sources familiar with the bloc's estimates.

The EU's executive arm was to officially release its new forecasts later Monday after predicting in November that the 27-nation bloc's economy would grow by a meagre 0.2 percent in 2009.

In mid-December, the EU's Commissioner for Economic and Monetary Affairs, Joaquin Almunia, indicated the numbers would soon be revised and that they would be "slightly more negative than the estimates on November 3."

Die Welt reported that the new number -- the two-percent GDP contraction -- will be much worse than had been expected.

According to Die Welt, the European Union also plans to reinforce measures aimed at boosting the economy following a 200-billion-euro (267-billion-dollar) stimulus plan decided on in December.

European Commission chief Jose Manuel Barroso is to make new proposals in early March at the latest, according to the newspaper, so they can be adopted at the next EU summit in mid-March.

The new measures would seek to "lighten the load weighing on businesses," Die Welt reported.

Proposals being considered include a special credit mechanism, easier access to public contracts for companies and fewer requirements related to reporting statistics, the paper said.

In the wake of the new estimates, European finance ministers will also meet on Monday and Tuesday for talks focused on whether EU governments are doing enough to combat the economic crisis.

Daily newsletterReceive essential international news every morning