The Commission explicitly speaks of “recession”, even if “mild”, and with some “signs of stabilization”: the interim economic forecasts, presented in Brussels on 23 February, confirm that the crisis at the continental level is not yet behind us. In 2012 GDP will remain at zero percent in the 27-member Union, while in the euro area it will even suffer a contraction of 0.3%.

Beyond the figures. So the Executive has cut yet again its forecasts by over half a percentage point since the end of 2011: “We can predict that only in the second half of 2012 will a modest recovery be registered”, explained Olli Rehn, Commissioner for Economic and Monetary Affairs, after he had presented the figures on Gross Domestic Product, the risks linked to the international context, inflation (just over 2%) and economic sentiment. The Finnish politician then underlined the need to pursue “global responses” to the recession that is impacting on the EU as a whole. And immediately after he spelt out five “political conclusions” deducible from the interim forecasts: first, the need to stabilise the Greek situation (“the second aid plan has been adopted; the next few weeks will be crucial for its implementation”); second, the reinforcement of financial firewalls (anti-crisis mechanisms); third, the stabilization of the financial and credit sector; fourth, the reinforcement of economic governance at the Community level; and fifth, and not least, the urgent need to pursue national reforms for growth and jobs, a key question that will be tackled once again at the next European Council on 1/2 March.

Different situations. “The unexpected stalling of the recovery in late 2011 is set to extend into the first two quarters of 2012. However, modest growth is predicted to return in the second half of the year”. In the text of the Interim Economic Forecast (a 45-page document), some components of the recession that is still underway in Europe are spelt out and were commented on by Commissioner Olli Rehn in his press release. “Uncertainty remains high – he says – and developments across countries are uneven”. If the growth of GDP remains stalled at 0.0% in the EU27, it has dipped by -0.3% in the 17 countries of the single currency. The worst situations are registered in Greece (-4.4%), Portugal (-3.3), Italy (-1.3), Spain (-1.0) and the Netherlands (-0.9). Positive forecasts are made, instead, for Germany and the UK (both with a plus of 0.6%) and for France (0.4); the performances of Poland (2.5) and Lithuania (2.3) are all things considered good.

Overall instability. The evaluations go beyond the numbers and the tables: if the interim forecasts confirm the deep difficulty in which some countries already in the eye of the storm in terms of sovereign debt are still plunged, we find that the list of member states with negative GDP now includes the Netherlands, traditionally among the most vigorous economies of the continent. Even the traditional “motors” of the EU economy, though they remain above zero growth, are failing to achieve full recovery: that goes for Germany, the UK and France. Some national situations have by now become chronic – e.g. Spain and Greece -, others have been added to the list of economies that are substantially stalled or heading in reverse: that goes, though for different reasons, for Italy, Belgium, Austria, Slovenia, and the Czech Republic.

“Particular cases”. Some nations are still registering a slight growth in GDP, but are very far from their performances last year: Estonia – paradigmatic case – had a GDP of +10.1% in 2006, but this had precipitated to -14.3% in 2009; it then recovered to +7.5% in 2011, and now stands at +1.2%. Sweden had a GDP of +4.3% in 2006, but this had plummeted to -5,2% in 2009, only to recover to +4.2% in 2011; it now stands at +0.7%. Similar cases are registered in Slovenia, Denmark, Finland, Slovakia, Bulgaria, Hungary and Romania. “In the course of this year – says the Interim Forecast – the dynamic of GDP is set to remain negative in 9 countries, to remain stalled in one state and to be positive in the other 17”.

Exports, consumption and investments. Rehn, again in an attempt to look beyond the figures, adds: “Many of the steps that were essential to deliver financial stability and to establish the conditions for more sustainable growth and job creation have now been taken. With decisive action, we can turn the corner and move from stabilization to boosting growth and jobs”. The Commissioner tries to be upbeat, even if he has to recognize that some decisions taken in terms of sovereign debt have not had the hoped-for results. There remains, in addition, “a less supportive global economy”: EU exports are likely to be curbed by “the ongoing weakening of global demand”. EU business and consumer confidence is also feeling the effects of the recession. In this case too positive elements for growth are forecast only in the second half of the year.

24/02/2012 -