The eurozone economy will shrink more than expected this year with France sliding into recession, according to a gloomy European Commission report. The Commission forecast says euro-area growth will shrink by 0.4% this year, down from 0.3% forecast in February.
France will go into recession this year with negative growth of 0.1% and unemployment rising to 10.9% in 2014 from 10.6% this year. On Thursday, the European Central Bank cut interest rates on growth worries.
"Grappling with the aftermath of a profound financial and economic crisis, the EU economy is set to pick up speed only very slowly in the course of this year," the report said. It predicted that France's deficit would rise sharply from 3.9% of GDP this year to 4.2% in 2014. That prompted the EU's commissioner for economic affairs, Olli Rehn, on Friday to say it would be "reasonable" to give France two extra years to meet the EU deficit target of 3%. However, Reuters reported a French finance ministry official as saying that, despite Mr Rehn's comments, the country would stick to its aim of meeting the 3% target in 2014.THE PINKOS LED BY HOLLANDE WILL ATTEMPT TO GET TO THE 3% TARGET BY RAISING TAXES. A BIG MISTAKE. THEY NEED TO CUT SPENDING AND TAXES AND REDUCE REGULATIONS TO ATTRACT INVESTMENT AND GROW THE REAL ECONOMY.
THE FIRST BUNCH OF TAXES FRANCE AND THE REST OF THE EU OUGHT TO CUT ARE THE ENERGY TAXES AND THE ANTI-CARBON TAXES.
THEN, THEY NEED TO RELAX ALL THE EMPLOYMENT REGULATIONS TO MAKE IT EASIER FOR COMPANIES TO HIRE AND FIRE.
THEN THE EU NEED TO LET CYPRUS AND SPAIN AND ITALY AND IRELAND AND PORTUGAL LEAVE THE EURO.
AND THEN LET THE EURO COLLAPSE.
FAILING THESE ACTIONS, EUROPE IS GOING INTO A DEPRESSION.
AND DRAGGING THE WORLD DOWN WITH IT...