Cause and Effect in European Politics and Law

A slight optimism for EU economy

Adelina Marini, May 4, 2009

A good start of the week with slight optimism for the future of the European economy. According to the Spring forecast of the European commission for EU economy 2009 still is going to be tough but there's a light in the tunnel yet for next year when the Commission expects a slight recovery. According to the forecast the EU GDP will fall with 4 % this year but will stabilise some time in 2010. The Commission believes that fiscal and monetary measures are already effecting European economy and it is expected the economy to start growing again next year.

Labour markets would suffer severely from the crisis as employment is expected to rise to 11 % in the EU next year. Public deficit is also expected to rise sharply to 7,25 % from GDP next year.

For Bulgaria data shows that this year Bulgaria will face a recession of -1.6 % and for next year the forecast is a little more encouraging but again with a minus -0.1 %. Inflation will be around 3.9 % for this year and next will fall to 3.6 %. One of the biggest nightmares for the economy, according to the experts i the budget deficit. The Commission forecast shows that this year Bulgaria would have for the first time in many years a deficit of 0.5 % and the current account deficit will be -18.8 %. The government refuses for now to recalculate the budget for 2009 although the financial minister himself acknowledged last week that the government forecasts of some months ago were quite over estimated.