18/03/2003 11:19
The European Union's estimates over the economy of the eurozone countries are pessimistic since the imminent war in Iraq has become a threat for the basic indices.
According to the three-month report of the European Commission, GDP is not expected to increase by 1.8%(November estimates), while recovery will only take place in the second half of the current year under certain conditions.
Meanwhile, the geopolitical instability has shaken consumers and has Brought about a significant price hike in fuel. The other factors that affect negatively the eurozone economy are 1) the slump of the stock markets compared to 2000, 2) the non-restructuring of the companies, 3) the insufficient reaction of the economies to the crisis.
The duration of the war is also an issue of great importance. The Commission has prepared 4 scenarios with the possible negative impacts of the war.
The worst scenario provides for a price hike in oil that will affect Economy worldwide. It is likely that the profits of the companies will fall, investments will be postponed, stock markets will further slump and tourism will shrink. In that case, European economy will enter a recession period.
According to the three-month report of the European Commission, GDP is not expected to increase by 1.8%(November estimates), while recovery will only take place in the second half of the current year under certain conditions.
Meanwhile, the geopolitical instability has shaken consumers and has Brought about a significant price hike in fuel. The other factors that affect negatively the eurozone economy are 1) the slump of the stock markets compared to 2000, 2) the non-restructuring of the companies, 3) the insufficient reaction of the economies to the crisis.
The duration of the war is also an issue of great importance. The Commission has prepared 4 scenarios with the possible negative impacts of the war.
The worst scenario provides for a price hike in oil that will affect Economy worldwide. It is likely that the profits of the companies will fall, investments will be postponed, stock markets will further slump and tourism will shrink. In that case, European economy will enter a recession period.
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