European Commission eases Brexit impact on economy winter forecast

New Europe / Alexandros Michailidis

Press conference by European Commissioner for Economic and Financial Affairs Pierre Moscovici in Brussels, Belgium, 01 Dec 2017.

The wake of Brexit paints a grey picture over the British economy’s future, while the EU’s forecast is of better fate


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“Economic growth is projected to moderate in 2017 and weaken further in 2018,” according the the EU executive arm’s winter economic forecast. This period coincides with the U.K.’s negotiation with the remaining 27 member states of the EU over Brexit.

U.K.’s growth is expected to fall dramatically from 3.1% in 2014 to a projected 1.2% for 2018, while the EU is projected to grow by a net 0.2% – from 1.6% in 2014 to 1.8% in 2018. This growth is slightly impacted by the slight fall to 1.7% observed in 2016.

The EU’s winter forecast report also notes the wild card, new U.S. President Donald Trump and his administration, that increases the uncertainty of its projections.

“The European economy has proven resilient to the numerous shocks it has experienced over the past year,” said EU Financial Affairs Commissioner Pierre Moscovici. “Growth is holding up and unemployment and deficits are heading lower.

“With uncertainty at such high levels, it’s more important than ever that we use all policy tools to support growth,” said Moscovici in reference to the EU’s full electoral year, with presidential elections in France and parliamentary elections in the Netherlands and Germany.

Greece: Downward risks relate to uncertainties over the completion of the second review

Moscovici announced that he is expected to meet Greek Prime Minister Alexis Tsipras and finance minister Euclid Tsakalotos in Athens on Wednesday to continue discussion after last Friday’s unsuccessful technical level meeting in Brussels. The heads of mission are not expected to come back to Athens earlier than Moscovici’s meetings.

This makes it even more difficult for Greece to conclude with the second review before the 20 February Eurogroup meeting deadline.

“Downward risks mainly relate to uncertainties over the completion of the second review of the ESM programme and external factors such as international and regional geopolitical and economic tensions, as well as the refugee crisis,“ the European Commission’s winter forecast wrote on Greece,

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