In 2014, the economy in the euro area is expected to grow by 1.2 % in all countries of the eurozone, with the exception of Cyprus. However, only at first glance, this seems to be the successful outcome of the crisis policy of the past years. In fact, slow growth can indeed also be observed in those countries, which suffered most under the crisis of the past years and which were most severely affected by the austerity policy, such as Portugal or Greece. These states are far from reaching a level, which they had enjoyed prior to the crisis. Hence, the economic recovery is taking place rather more in spite of this policy than because of it. This is added by the fact, that the economic growth will hardly be felt by the people. At 11.8 % and 11.4 % respectively for this and the coming year, the unemployment rate remains alarmingly high.

The Commission pins it hopes on consumption as a support of growth. Due to the fact alone that the Commission has been instrumental for years in cancelling collective agreements and other labour rights, one cannot count on an increase in real wages. Hence, it is to be feared that this hope is rather futile.

However, the Commission has not learned any lessons from the crisis, which had been made worse by the austerity course. Instead of large investments, it requests further structural reforms to liberalise markets and to deregulate labour rights.

Further information:

European Economic Spring Forecast