News / Economy

Growth Forecast Prompts Hope for End to Euro Crisis

Growth Forecast Prompts Optimism Euro Crisis is Fadingi
X
February 27, 2014 3:07 PM
The European Union has revised upward its forecasts for economic growth. The news comes as Greece aims to secure another slice of its bailout money after posting a budget surplus. In Italy, the new government has pledged to turn around the stagnant economy. So is this the beginning of the end of the euro crisis? Many analysts think not, as Henry Ridgwell reports for VOA from London.
Henry Ridgwell
— The European Union has revised upward its forecasts for economic growth. The news comes as Greece aims to secure another slice of its bailout money after posting a budget surplus. And in Italy, the new government has pledged to turn around the stagnant economy.

So is this the beginning of the end of the euro crisis? Many analysts think not.

The welcome was hostile in Athens as bailout inspectors from the so-called troika of international lenders - the European Union, the International Monetary Fund and the European Central Bank - arrived for talks at Greece’s Finance Ministry.

Greece desperately needs its next tranche of bailout money to fund debt payments in May that will total $12.8 billion. Talks have stalled for months over claims that Greece is dragging its feet over labor reforms.

Protesters shouted at the inspectors: “We are talking about human lives, you are talking about profits and losses.”

Since 2008, Greece’s economy has shrunk by nearly a quarter; unemployment is at 28 percent.

The country has just posted a budget surplus of 1.5 percent of GDP - good news after years of brutal austerity.  But there’s a long way to go, says analyst Simon Tilford with the London-based Center for European Reform.

“Certainly no developed or even second-world country has ever pulled off a fiscal adjustment of the scale that the Greeks have managed.  But they don’t just need a surplus; they need a huge surplus in order to service their debt burden," said Tilford.

The EU issued revised growth forecasts this week - suggesting the eurozone will grow by 1.2 percent this year and 1.8 percent in 2015.

Olli Rehn is EU commissioner for economic and monetary affairs.

“Recovery in the European Union is gaining ground and spreading across countries, although it remains still modest. It is good news that economic activity has also started to strengthen in the vulnerable countries," said Rehn.

Italy is seen as one such vulnerable eurozone member. The former mayor of Florence, 39-year-old Matteo Renzi, became the country’s youngest-ever prime minister this week after ousting his party rival. In a speech to the lower house, he pledged to slash spending and taxes and "revolutionize" Italy’s economy.

“Outside of this parliament, nobody believes any longer that politicians can get things done,” Renzi said. “Therefore, at great risk, we have pledged to accelerate a process to implement reforms within precise deadlines.”

With political change in Italy - and green shoots of recovery in the eurozone - some EU politicians believe this is the beginning of the end of the euro crisis, says the Center for European Reform's Simon Tilford.

 “I think there is a risk of complacency that a return to growth and relative calm on the financial markets is encouraging European policymakers to believe that they can get away without any significant institutional reforms of the Eurozone - i.e., without any pooling of risk or any fiscal mutualization," he said.

Without those changes, many analysts fear Europe will fail to solve the inherent problems at the core of the eurozone. But news that even the weaker economies are showing signs of life has been warmly welcomed after seven years of austerity and stagnation.

You May Like

At Khmer Rouge Court, Long-Awaited Verdict Approaches

First phase of trial, which is coming to an end, has focused on forced exodus of Phnom Penh in 1975 - and now many are hopeful justice will be served More

Video When Fighting Eases, Gazans Line Up at Bakeries

When there is a lull in the conflict, residents who have been hunkered down in their apartments rush out to stock up on food and other necessities More

Video Information War Rages Alongside Real One in Ukraine

Downing of Malaysian airliner, allegations of cross-border shelling move information war in war-torn country to a new level More

This forum has been closed.
Comment Sorting
Comments
     
by: johnp from: UK
February 27, 2014 5:16 AM
Do they now employ former OECD forecasters?

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Information War Rages Alongside Real One in Ukrainei
X
Al Pessin
July 31, 2014 8:13 PM
The downing of the Malaysian airliner two weeks ago, and allegations that Russians are shelling Ukrainian troops across the border, have moved the information war swirling around the Ukrainian conflict to a new level. VOA's Al Pessin reports from Kyiv.
Video

Video Information War Rages Alongside Real One in Ukraine

The downing of the Malaysian airliner two weeks ago, and allegations that Russians are shelling Ukrainian troops across the border, have moved the information war swirling around the Ukrainian conflict to a new level. VOA's Al Pessin reports from Kyiv.
Video

Video When Fighting Eases, Gazans Line Up at Bakeries

When there is a lull in the conflict in Gaza, residents who have been hunkered down in their apartments rush out to stock up on food and other necessities. Probably the most important destination is the local bakery. VOA’s Scott Bobb reports from Gaza City.
Video

Video US-Funded Program Offers Honduran Children Alternative to Illegal Immigration

President Obama and Central American leaders recently agreed to come up with a plan to address poverty and crime in the region that is fueling the surge of young migrants trying to illegally enter the United States. VOA’s Brian Padden looks at one such program in Honduras - funded in part by the United States - which gives street kids not only food and safety but a chance for a better life without, crossing the border.
Video

Video 'Fab Lab' Igniting Revolution in Kenya

The University of Nairobi’s Science and Technology Park is banking on 3-D prototyping to spark a manufacturing revolution in the country. Lenny Ruvaga has more for from Nairobi's so-called “FabLab” for VOA.
Video

Video Gazans in Shelled School Sought Shelter

Israel's air and ground assault against Hamas-led fighters in Gaza has forced many Palestinians to flee their homes, seeking safety. But safe places are hard to find, as VOA’s Scott Bobb reports from Jabaliya.
Video

Video Rapid Spread of Ebola in West Africa Prompts Global Alert

Across West Africa, health officials are struggling to keep up with what the World Health Organization describes as the worst ebola outbreak on record. The virus has killed hundreds of people this year. U.S. President Barack Obama and other world leaders are watching the developments closely as they weigh what actions, if any, are needed to help contain the disease.
Video

Video Michelle Obama: Young Africans Need to Embrace Women's Rights

U.S. first lady Michelle Obama urged some of Africa's best and brightest to advocate for women's rights in their home countries. As VOA's Pam Dockins explains, Obama spoke to some 500 participants of the Young African Leaders Initiative, a six-week U.S.-based training and development program.
Video

Video Immigrant Influx on Texas Border Heats Up Political Debate

Immigrants from Central America continue to cross the U.S.-Mexico border in south Texas, seeking asylum in the United States, as officials grapple with ways to deal with the problem and provide shelter for thousands of minors among the illegal border crossers. As VOA's Greg Flakus reports from Houston, the issue is complicated by internal U.S. politics and U.S. relations with the troubled nations that immigrants are fleeing.
Video

Video Study: Latino Students Most Segregated in California

Even though legal school segregation ended in the United States 60 years ago, one study finds segregation still occurs in the U.S. based on income and race. The University of California Los Angeles Civil Rights Project finds that students in California are more segregated by race than ever before, especially Latinos. Elizabeth Lee reports for VOA from Los Angeles.

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.