EU SLASHES EUROZONE GROWTH FORCASTS

Commissioner Olli Rehn delivering his eurozone growth forecast.

Photograph: Geert Vanden Wijngaert/AP

“The recovery in the EU has now

come to a standstill and there is the risk

of a new recession unless determined action is taken,”

said Commissioner Olli Rehn.

The European Union on Thursday has sharply downgraded the economic forecasts for the eurozone to just 0.5 percent growth in 2012, and warned that several countries may slip into recession in coming months.

Brussels had previously banked on 1.8 per cent growth for next year, but scaled back its expectation amid a resurgence of the eurozone debt crisis two years after it first started.

All 17 countries that use the euro saw their growth forecasts lowered for 2012. Those in the so-called core of the currency bloc were downgraded most severely:

• Germany from 1.9 per cent to 0.8 per cent,
• France from 2 per cent to 0.6 per cent and
• the Netherlands from 1.7 per cent to 0.5 per cent.

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