EU Commission: Euro and Oil Prices Are Low

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Image Credit: http://ec.europa.eu/

A statement was released by the EU Commission on May 13 2015 which states that the Growth of the EU’s economies is benefiting from many supporting factors at once. According to the statement, the oil prices are relatively low, global growth is steady, the euro has continued to depreciate and economic policies in the EU are supportive of growth.

In its latest economic forecast published on 5 May 2015, the Commission forecasts GDP growth to be 1.8% in the EU (1.5% in the euro area) in 2015 and expects the trend to accelerate to 2.1% in 2016 (1.9% in the euro area).

On Friday 15 May 2015, the European Commission in Austria will held a press conference on the package of country-specific recommendations which will adopted this year.

Dr. Johann Sollgruber, Head of the Representation of the European Commission and Marc Ensign, responsible for economic policy coordination and the European Semester in Austria will brief the journalists about the European semester is the economic policy coordination within the EU. It serves the identification of growth-promoting structural reforms.

All EU member states have committed themselves to achieving the objectives of Europe 2020 and to translate these into national targets and growth-promoting strategies. The desired growth effects can unfold better if individual Member States’ efforts are coordinated. For this reason, the Commission adopts every year a detailed analysis of economic and structural reform programs of the EU countries and provides recommendations which should be implemented substantially in the next 12 to 18 months.

The EU Commission has published the country-specific recommendations for each Member State, along with an overarching on how to strengthen and sustain the recovery, and how the streamlined European Semester is implemented. (See PDF – Eccom2015)

However, the EU still faces underlying weaknesses as a result of the crisis and the low longer-term growth trends already experienced pre-crisis according to the EU Commission statement released on Wednesday 13 2015 in Brussels. The labour market situation is gradually improving, not least due to reforms implemented in several Member States in recent years, unemployment is still intolerably high (9.6%). Poverty and marginalisation have increased. The high level of private and public debt continues to weigh on investment and growth in a context of persistently low growth and low inflation.

In some Member States, the share of non-performing bank loans is high and still rising. A large investment gap estimated at over EUR 300 bn accumulated over the past six years has had a negative effect on domestic demand in the short term and on potential growth in the medium to long term. The trend of declining productivity growth has not yet been reversed and population ageing will have big impacts on the future labour force.

Greater efforts are needed to overcome these weaknesses and build a robust and balanced recovery that is sustainable beyond the short run. Since taking office, this Commission has set out a focused and ambitious economic and social agenda and has streamlined the European Semester process to concentrate on the most urgent priorities. In its 2015 Annual Growth Survey, the Commission put forward three interrelated priorities for EU level economic policy: a coordinated boost to investment, a renewed commitment to structural reforms and pursuing fiscal responsibility.

The 2015 country-specific recommendations and the new recommendation to the euro area have been selected against this background to focus on growth drivers that will help make the recovery sustainable and prevent sluggish growth once the temporary tailwinds fade. They focus on: See PDF – Eccom2015.

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