EU sees bright outlook for economy, tougher times for UK

EU sees bright outlook for economy, tougher times for UK
The Associated Press

BRUSSELS (AP) — The European Union is expecting strong economic growth this year and next year but predicts that departing Britain will see tougher times ahead.

The EU says in its spring economic forecast that growth should be a robust 2.3 percent this year and only ease slightly to 2.0 percent in 2019 for both the 28-nation bloc and the 19-member eurozone of members sharing the same currency.

EU Commission Vice-President Valdis Dombrovskis says that “the economic expansion in Europe is set to continue at a solid pace this year and next, supporting further job creation.”

The EU says it expects growth in Britain, which is slated to leave the bloc in March 2019, to stand at 1.5 percent and 1.2 percent this year and next.

The EU included the important proviso that its forecast was based on a status quo, which is bound to change because of the ongoing Brexit negotiations.

The EU also painted a rosier picture of the budgets of the 19 EU countries that use the euro. It said that for the first time ever all the eurozone countries are set to bring their budget deficits within the ceiling of the 3 percent of GDP.

The upbeat forecasts also applied to France, which had long been struggling to get its deficit under the benchmark but now looks set to keep there this year and next, too.

The eurozone posted its highest economic growth in a decade last year — at 2.4 percent — but Dombrovskis warned countries need to make more reforms to not lose momentum.

“We should use the current good times to make our economies more resilient,” he said, insisting on building more security in the monetary system and reforming the continental economy to better face global competition.