Marco Buti , the European Commission’s head of economics, is calling for a doubling of the European bailout fund, Der Spiegel reported, without saying where it got the information.
The euro-area economy will continue to lag behind its main competitors, the U.S. and China, this year and next as high levels of unemployment and debt hinder the currency bloc’s recovery.
Europe’s economic recovery “is set to be bumpy” and the euro’s weakness will help boost exports, the European Union said.
Opposition to payouts on Greek credit-default swaps from European Union policy makers is softening as disputes over a voluntary debt exchange threaten to push the nation into default.
The euro-area economy will shrink more than previously estimated in 2013 as part of a two-year slump that has pushed up unemployment to a record, according to the European Commission.
The European Commission predicted low inflation will remain a threat to euro-area expansion for at least the next two years as it trimmed its economic-growth forecast and warned of the impact of tensions with Russia.
The euro area’s potential economic growth over the next decade will be about half that of the 10 years before the debt crisis if governments don’t change their policies, the European Commission said.
The euro-area economy will shrink in back-to-back years for the first time, driving unemployment higher as governments, consumers and companies curb spending, the European Commission said.
The European Union trimmed its forecast for euro-area growth next year and raised its unemployment estimate as the economy struggled to regain momentum after a record-long recession.
"The legacy of the global financial and economic crisis lingers on."
- Marco Buti on Nov 04, 2014