The European Commission has said that the EU economy has turned the corner and a period of strong and sustained growth is under way. The Commission today published its first ever report analysing the EU as a single economy, a move prompted by the launch of the single currency. The report says growth will create more jobs and allow governments more spending options.
In its first review of the EU economy, the Commission says that there is a robust economic recovery under way. It says that the GDP growth for the EU should increase to 3% next year and the year after. The strong growth and the continued meeting of budget targets by the member states should allow states to introduce tax cuts designed to boost job creation. The Commission says that governments should also focus on supporting entrepreneurs to take advantage of Europe's stable economic environment.
In a separate publication, the Commission looks at economic prospects for individual member states, up to 2001. It says that Irish economic growth will continue at well above average levels, but warns the economy is showing signs of overheating. Strong growth in the Eurozone and in the UK will mean continuing export growth. However, higher wages and low unemployment will result in more imports leading to a trade deficit for the first time since 1990. The main dangers are inflation, which will be above the EU average, higher wages making exports less competitive and vary high house prices.