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| Version 3 | Version 4 |
|---|---|
| European economy 'will shrink 4%' | European economy 'will shrink 4%' |
| (10 minutes later) | |
| The eurozone and EU economies will contract by 4% this year, the European Commission has forecast, in a massive revision from its earlier prediction. | The eurozone and EU economies will contract by 4% this year, the European Commission has forecast, in a massive revision from its earlier prediction. |
| The worsening of the global financial crisis, dropping levels of world trade and continuing house value falls had prompted the downgrade, it said. | The worsening of the global financial crisis, dropping levels of world trade and continuing house value falls had prompted the downgrade, it said. |
| Europe's economy would not start recovering until the second half of next year, the commission added. | Europe's economy would not start recovering until the second half of next year, the commission added. |
| It also predicted unemployment in the eurozone would rise to 11.5% in 2010. | It also predicted unemployment in the eurozone would rise to 11.5% in 2010. |
| The figure would reach 10.9% in the 27-nation EU next year, it said. | The figure would reach 10.9% in the 27-nation EU next year, it said. |
| 'Exceptional cicumstances' | 'Exceptional cicumstances' |
| "The European economy is in the midst of its deepest and most widespread recession in the post-war era," said EU Economic and Monetary Affairs Commissioner, Joaquin Almunia. | "The European economy is in the midst of its deepest and most widespread recession in the post-war era," said EU Economic and Monetary Affairs Commissioner, Joaquin Almunia. |
| "But the ambitious measures taken by governments and central banks in these exceptional circumstances are expected to put a floor under the fall in economic activity this year and enable a recovery next year." | "But the ambitious measures taken by governments and central banks in these exceptional circumstances are expected to put a floor under the fall in economic activity this year and enable a recovery next year." |
| Countries needed to focus on cleaning up banks' toxic assets, he added. | Countries needed to focus on cleaning up banks' toxic assets, he added. |
| The commission's forecast is not as bleak as the outlook from the International Monetary Fund (IMF) - which says eurozone GDP will fall by 4.2% this year. | The commission's forecast is not as bleak as the outlook from the International Monetary Fund (IMF) - which says eurozone GDP will fall by 4.2% this year. |
| However it is less optimistic than the European Central Bank which forecast a 3.8% contraction in its latest estimate. | However it is less optimistic than the European Central Bank which forecast a 3.8% contraction in its latest estimate. |
| In January, the commission had predicted the eurozone would shrink by 1.9% in 2009 and grow by 0.4% in 2010. | |
| As well as the downward revision for this year, it now expects the eurozone economy to shrink by 0.1% next year. | |
| Irish woes | Irish woes |
| The commission expects inflation to fall well below the European Central Bank's target of 2%. | The commission expects inflation to fall well below the European Central Bank's target of 2%. |
| It projects inflation to slow to 0.4% this year from 3.3% in 2008, and to rise to only 1.2% in 2010. | It projects inflation to slow to 0.4% this year from 3.3% in 2008, and to rise to only 1.2% in 2010. |
| While the downturn was widespread, the extent of economic contraction varied between nations. | While the downturn was widespread, the extent of economic contraction varied between nations. |
| Germany, Europe's biggest economy, is expected to contract 5.4% this year, while the UK and Italy are expected to shrink by between 4% and 4.5%. | Germany, Europe's biggest economy, is expected to contract 5.4% this year, while the UK and Italy are expected to shrink by between 4% and 4.5%. |
| However the once-booming Irish economy will see a 9% drop and Latvia will shrink by 13.1%, the commission said. | However the once-booming Irish economy will see a 9% drop and Latvia will shrink by 13.1%, the commission said. |
| "The main factors behind the recession are the worsening of the global financial crisis, a sharp contraction in world trade and ongoing housing market corrections in some economies," the commission said in a statement. | "The main factors behind the recession are the worsening of the global financial crisis, a sharp contraction in world trade and ongoing housing market corrections in some economies," the commission said in a statement. |