A major new report published on Wednesday predicts European GDP growth of 1.9% for the remainder of this year. The report also forecasts a slightly lower rate of growth, 1.6%, in the eurozone.
These are some of the main findings of BUSINESSEUROPE’s “Spring Economic Outlook.” They are based on a survey of its member federations across the continent.
The findings were presented by its Director General Markus J. Beyrer at a news conference in Brussels.
He said, “Our latest forecast includes two positive signs: We have indications that consumers are slightly more confident about their future.
“And companies are increasingly seeking money to finance new investments. But I fear that access to finance will become an increasingly biting constraint once the economy picks up”, Beyrer said.
“The improved outlook is largely a result of fortunate circumstances such as the decline in oil prices and the weaker euro. To maintain a stronger recovery over the long-term, Europe must reduce structural obstacles to investment, competitiveness and growth”,
The economic recovery will slightly strengthen in 2016, says BUSINESSEUROPE, when it foresees GDP to grow by 2.1% in the EU and by 1.9% in the eurozone.
The report adds, “Domestic demand should gradually replace net exports as the main growth driver. Amidst signs of growing consumer confidence we expect EU private consumption growth of 1.9% in 2015. Businesses are reporting the highest demand for finance since the start of the crisis and we expect investment growth of 2.8% this year.
“While remaining at high levels, unemployment is expected to fall a little; to 9.5% (from 9.8%) in the EU and 10.6% (from 11.3%) in the EA in 2015, and to 9.0% (EU) and 10.1% (EA) in 2016. Country differences still remain high.
Meanwhile, a new study says that leaving the European Union could cost Britain 313bn euros while other EU nations would suffer only minor economic losses if it withdrew.
Bertelsmann Stiftung, a German think tank, found that the UK economy would grow more slowly after losing the benefits of trading with its EU partners. The first study of the impact of “Brexit” (British exit) for the EU as a whole predicted “long-term negative consequences” for the UK but a “significantly smaller” economic effect for the rest of the 28-nation bloc.
In Britain, the sectors worst hit by losing the link with the EU’s single market would include chemicals, financial services, automative and mechanical engineering.
However, UKIP MEP Paul Nuttall, its deputy leader, says the report is “nothing but a propaganda exercise by a German-financed load of euro-federalists.”
He said, “What else could one expect from an organisation which hires ex-eurocrats and runs a headline across its website proclaiming ‘The United Citizens of Europe?'”
“At the top of Bertlesmann Foundation is its board of trustees, and one of them is former European Commissioner Viviane Reding. Last year she called for a full United States of Europe. Even our own pro-EU foreign office has described her as ‘an unrepentant federalist’ with ‘no understanding of the EU’s deep flaws.'”
Nuttall added: “One of the two authors of the report is Ulrich Schoof, who used to work for the European Commission and also for the European Parliament. We can hardly be surprised that the ‘proof’ this ex-eurocrat offers that leaving the EU would be a blow to the British economy is a slim eight pages long. Serious studies in Britain on the effects of Brext run to hundreds of pages. Many of these studies show that Brexit could lead to increased UK prosperity.”
By Martin Banks