Gloomier outlook for Europe

Policy Study

09/10/2014

 

Outlook and scenarios for the European economy

This new FEPS-ECLM paper highlights growth forecasts from the main international organisations, and the way in which the European economy could develop in the coming years following various scenarios. Indeed, a further escalation of the crisis, for example due to insufficient or late political responses, could have major consequences. In addition, most European countries have tightened fiscal policy over the last couple of years and are expected to continue doing so in the coming years. However, investment ratios are low and private savings surpluses are high in Europe, which indicates that there is great potential for creating confidence in the European economy and in this way increase consumption and investment, which would favour an increase in growth and employment.

Summary
The global outlook began to brighten in early 2012, but lately the situation has again deteriorated, and in the latest forecast from the OECD the GDP growth is expected to be close to zero this year. As a consequence of the crisis more than 22 percent of the young Europeans are today unemployed. Most European countries have tightened fiscal policy the last couple of years and are expected continuing doing so in the coming years. But investment ratios are low and private savings surpluses are high in Europe, which indicates that there is a great potential in creating confidence in the European economy and in this way increase consumption and investment. The greatest risk to the European outlook is still related to the situation in the debt-ridden European countries – especially in Southern Europe. A further escalation of the crisis, for example due to insufficient or late political responses, could have major consequences. On the other hand, it is also possible that Europe manages to get out of the crisis faster than at first thought. But getting Europe out of the crisis will require further policy actions, both at the European level as well as on the national level. If this happens it can create close to 2 mio. jobs in Europe.

Table of content:

  • Outlook for the European economy in the coming years
  • Youth unemployment in Europe on a historical high level
  • Fiscal policy during the crisis
  • Large growth potential if consumption and investment are increased in Europe
  • Scenarios for the European economy
  • Negative scenario: Worse outlook for Spain and Italy
  • Positive scenario: Further policy action
Find all related publications
Publications
19/02/2024

Women CSO leaders for systemic change

How to support feminist leadership in Europe
12/02/2024

The Social Pillar and the future of the EU Social Agenda

01/02/2024

Bridging the gender pay gap in the Western Balkans?

A country case study of Croatia, North Macedonia, Serbia and Slovenia
24/01/2024

Progressive Yearbook 2024

Looking back to look ahead
Find all related Progressive Post
Progressive Post
22/02/2024

Ukrainian democracy vs. the Russian war: how to increase resilience

22/02/2024

European integration in wartime: the EU’s imperative to preserve and rejuvenate Ukraine’s democracy

22/02/2024

War economy: how economic policy can help Ukraine win the war

Find all related news
News
23/02/2024

FEPS mission to Brazil

24/01/2024

Spanish Minister Teresa Ribera awarded FEPS ‘Progressive Person of the Year’

23/01/2024

Call for tender – FFP Research and network coordinator

This call for tender is now closed.
18/01/2024

FEPS President at Euronews talk-show ‘Brussels, my love?’

Find all related in the media
In the media

Teresa Ribera, premiada por su labor en política internacional

by El Plural 26/01/2024
Teresa Ribera has been recognized by FEPS with the 'Progressive Person of the Year' award during the launch of the 'Progressive Yearbook.' Article by El Plural

Teresa Ribera, premio ‘Pregressive person of the year’ por su labor en política internacional

by Europa Press 26/01/2024
Teresa Ribera has been recognized by FEPS with the 'Progressive Person of the Year' award during the launch of the 'Progressive Yearbook.' Article by Europa Press

Teresa Ribera, galardonada como “progresista” del año por la Fundación FEPS

by Agencia EFE 26/01/2024
Article by Spanish news agency Agencia EFE, republished by other media via newswire

»Der er tale om en markant udvikling«: Det vrimler med Wolt-bude

by Politiken 19/01/2024
'"This is a significant development": Wolt workers are everywhere' Politiken's article about the Digital Programme's first policy study: 'Employment terms of platform workers'