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.
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’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 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.
Europe’s economic recovery “is set to be bumpy” and the euro’s weakness will help boost exports, the European Union said.
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.
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 in back-to-back years for the first time, driving unemployment higher as governments, consumers and companies curb spending, the European Commission said.
Portuguese Prime Minister Pedro Passos Coelho said he still has the support of the CDS party after the leader of his junior coalition partner quit as foreign minister this week.
Portuguese Prime Minister Pedro Passos Coelho presented the country’s president with a plan to hold the government together after the leader of his coalition partner announced his resignation from the Cabinet this week.
"As long as debt in several sectors of the economy remains too high, unemployment is at record levels and the adjustment of previous imbalances is incomplete, there is a serious risk of growth remaining stuck in low gear."
- Marco Buti on Feb 25, 2014