EU Commission curbs ecomomic growth optimism

In its latest autumn interim report the EU Commission forecasts less growth of the European economy. Thus, for the second half of 2007 it forecast just 2.8% of growth in the EU and 2.4% for Germany. Both these figures differ by 0.1% from the values expected in the Commission´s previous report published in spring this year.

Despite the international financial crisis the High Commissioner for economic affairs, Mr. Joaquín Almunia, does not see any danger of a major bank crisis in Germany. As a consequence of current incidents, there would, however, be higher risk premiums on loans, he said. The recovery of the German labour market is seen positively by the Commission. However, Germans will in all likelihood be faced with further rising consumer prices (2.1% after 1.9% in spring).

According to the German finance minister, Mr. Peer Steinbrück, the German government will retain its forecast of 2.3% economic growth in 2007.

The forecast for the EU as a whole was also lowered by 0.1% to 2.8% by the Commission. Thus, currently the forecast for the EU13 (Eurozone) stands at 2.5% instead of 2.6%. At the same time the Commission expects inflation to amount to 2.2% within the EU.

The forecasts for France were corrected most from 2.4% to just 1.9%. GERMAN