№263. Stepping up Growth Policies
№263. Stepping up Growth Policies

Author(s): Stefano Micossi
Subject(s): National Economy, Economic policy, Evaluation research, EU-Accession / EU-DEvelopment
Published by: CEPS Centre for European Policy Studies
Keywords: Eurozone; GDP; IMF; Economic activity;
Summary/Abstract: The eurozone is in recession and will show negative growth in 2012; GDP will fall sharply in Greece and Portugal, and there is substantial risk that Spain and Italy will follow suit (the Commission’s recent forecasts seem overly optimistic and complacent; the IMF is more downbeat). But fiscal policies are uniformly restrictive throughout the eurozone and much of the Union, and the hopes that fiscal consolidation could spur growth by improving household and business confidence are not materialising. In reality, domestic demand has been hit too hard by fiscal consolidation, and investment throughout the Union remains well below pre-crisis levels.

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