The uncertainty remains

In 2011 gross domestic product ought to settle at 1.6% in the euro zone and 1.8% in the European Union as a whole. Unemployment is registering a very slight adjustment in a positive sense, falling, in the euro zone, from the 10.0% of last December to the current 9.9%. In the EU27. On the other hand, the jobless are 9.5%, against the previous 9.6%. Inflation has risen to 2.4%. These are the first data presented by the EU Commission, together with the intermediate economic forecasts, on 1st March.A new slowdown. “The recovery is continuing”, says the Commission in its intermediate forecasts document, even if after the good results in the first half of 2010 a further slowdown arrived in the second half of the year. The slight improvement of GDP is due “to the better prospects of which the global economy will benefit and the greater confidence of businesses”. Growth “ought to be driven by internal demand”, adds the Executive, while confirming that “the uncertainty remains strong and the situations of member states vary greatly”. Olli Rehn, Commissioner for Economic and Monetary Affairs, comments: “If the recovery has slowed down in the second half of 2010, it ought to pick up again in the course of 2011”. According to Rehn, the decisive factor of growth ought to shift from external to internal demand. And he adds: “The recovery remains unequal and many states are going through a difficult period of adjustment”. The Irish, Spaniards and Portuguese, and the populations of the Baltic States and some countries of Eastern Europe have had ample experience of that. “The situation has still to be normalized. To secure the recovery we must adopt an ambitious programme of budgetary adjustment and carry out structural reforms,” says Rehn.Germany and Poland doing well. The Commission’s intermediate forecasts are based on an analysis of the progress, or regress, clocked up by the main EU economies: in short, 7 countries (Germany, France, UK, Italy, Spain, Poland and the Netherlands) which, together, constitute 80% of the GDP of the Union. In the euro zone (whose political leaders are due to meet for an extraordinary summit on 11 March, while the traditional summit of the 27 on the economy is scheduled for the end of the month) “Germany ought to constitute the engine of the recovery, with a growth of GDP estimated at 2.4% for 2011”. It is set to be followed, in order, by France and the Netherland (1.7%), Italy (1.1%), and Spain (0.8%). Outside the single currency zone, the UK is indicating an annualized GDP of 2.0%, while in the case of Poland the estimated GDP growth is very positive, +4.1%. The slowdown in the second half of 2010 also weighed on economic recovery at the planetary level, but this year overall world GDP ought to be of the order of 4.75%. More general forecasts have also been published by the Commission: for example, a growth of private investments is expected, as also a positive signal in terms of family consumption, in turn favoured by some alleviation of the labour market.International instability. Apart from the figures, the message coming out of the Commission is one of extreme caution. For the elements of precariousness are many at the present time. The first of them is of an international political nature: the recent events in North Africa and in the Arab countries, with growing political instability, are likely to lead to further increases in the cost of energy supplies, especially of petrol and gas. In situations of world tension, moreover, it becomes more difficult to predict the development of markets and trade between one continent and another, not to mention the further discouragement of the propensity to make investments. Unemployed: there are over 23 million in EuropeAccording to the data furnished by Eurostat on 1st March, the jobless reached a total of 23,480,000 in the 27 member states of the EU (end of January 2011): of these, almost 16 million are in the 17 countries that adopted the single currency. The overall number of unemployed however has dropped by 43,000 over the figure for December 2010. The lowest percentage of the unemployed registered in the EU is that in the Netherlands and Austria (4.3%), followed by Luxembourg (4.7%); at the opposite end of the scale are Spain (20.4%), Latvia (18.3%) and Lithuania (17.4%). “Over the last year – says the Eurostat report – unemployment has dropped”, albeit slightly, “in 11 states; has remained stable in 2 and has increased in the other 14 countries”. Positive signals have been registered, for example, in Estonia and Sweden, while the most significant increase in persons in search of work was registered in Greece (rising from 9.7 to 12.9%). “In January 2011 the unemployment rate of the under-25s rose to 20.6%” at the EU level. The EU data are comparable to those of the USA, where 9 unemployed out of every 100 persons of working age were registered in January; in Japan, on the other hand, the unemployment rate is 4.9%.