Winter economic forecasts lower than previous Member States’ forecasts

The European Commission presented its economic forecast for 2016 yesterday. While “the upward trend” is confirmed, growth is “slightly less robust than expected”, Les Echos comments. Brussels lowered its ambitions compared to its last forecast, and the deteriorating condition of emerging countries, including China, is a “question mark” hanging over the future.

Les Echos’ editorialist Jean-Marc Vittori notes that the economic climate has reversed: after seven years of stagnation, Europe is back on track towards a 2% growth rate, unemployment is decreasing (except in France and Austria), whereas emerging countries, “yesterday’s promised land” for investors, are experiencing recessions or doubts. In spite of such “reassuring” news, there is “still cause for concern.” Although useful, the recent consolidation will not prevent economic and financial crises form returning, which “many central bankers are clearly concerned about”. Reports tend to focus on the situation in each country.

Le Monde reports that the European Commission’s winter economic forecast confirms its November forecast: France will fail to bring its deficit below 3% of GDP in 2017. The country will once again fail to keep its word, even though it managed to get a third deadline extension in February 2015, as it also did in 2013 and 2009, Le Figaro notes. In an opinion piece in Le Figaro, Marc Landré lists the economic promises that François Hollande has failed to honour: on public deficit, the debt, growth and unemployment. The latter is François Hollande’s greatest failure, writes Mr Landré.

Two weeks ahead of the Spanish election, Brussels weighed in with a report warning that Spain must undertake a further round of spending cuts and reforms, says El Pais. And it further delved into Spanish politics on Thursday with its winter forecast, in which the European Commission makes clear that the biggest risk for the economy is “uncertainty around the formation of a government.” An El País editorial argues that it is “comprehensible” for the European Commission to insist that Spain needs a government to face the challenges that go with economic recovery. But Spanish authorities should focus on convincing their European counterparts that Spain needs more time to reduce its deficit.

The European Commission’s economic forecasts show that the Italian government’s recent economic policy efforts are bearing fruit, but that there are still serious imbalances in the country’s economy, Il Sole 24 Ore reports. Meanwhile Economy Minister Padoan called for a rapid response to Italy’s application for more flexibility. EC Commissioner for Economic and Foreign Affairs Pierre Moscovici urged Italy to be “calm” and “patient“. L’Echo writes that the European Commission’s winter forecast for Belgium’s is neither good nor bad.

SZ’s Thomas Urban comments that Brussels worries about Portugal again. Since taking office, António Costa has handed out “expensive presents,” such as increasing the minimum wage or the reintroduction of four holidays. Mr Urban opines that “Lisbon currently squanders much time and gambles away much credit“. In its forecast, the European Commission underlines that the Greek government needs to take up additional measures in order to reach the fiscal targets for 2016 and 2017, reports Kathimerini. The newspaper highlights the high pressure exercised by the creditors, noting that it is unusual for the Commission to make such statements amid ongoing negotiations.

The European Commission predicts that in 2017 the Polish deficit will reach 3,4% of GDP. The direct cause of the deficit exceeding the 3% threshold was the Government’s family aid plan, the 500 Plus. Warsaw claims that additional expenditure involved with this programme will be covered by better tax collection, yet Brussels is sceptical,Rzeczpospolita reports. Polish reports say it is possible that the Commission will invoke the Excessive Deficit Procedure – lifted in 2015 – against Poland again. But Finance Minister Szałamacha has assured everybody that the deficit will be kept below 3%, Puls Biznesu reports.