The European Union has raised the growth prospects for the eurozone thanks to low crude prices and the weak euro. Brussels has, however, warned that due to deflation, eurozone’s struggling economies must stick to their reform efforts. Economic Affairs Commissioner, Pierre Moscovici, specifically pinpointed France and Greece. Whereas France must continue taking steps to decrease its budget deficit, Greece is expected to respect its commitments to its international creditors.
For the first time since the onset of the economic crisis, all EU members should grow, according to the estimates which the EU Commission confirmed. The latest forecast published by the Commission predicted that the eurozone economy should grow by 1.3 percent this year instead of 1.1 percent, which was estimated in November last year. “The fall in oil prices and the cheaper euro are providing a welcome shot in the arm for the EU economy,” said Moscovici in an official statement and added that “there is still much hard work ahead to deliver the jobs that remain elusive for millions of Europeans.”
According to the latest forecast, Greece should grow by 2.5 percent this year and 3.6 percent next year. Mr Moscovici, however, stressed that this implied “the full implementation” of the country’s bailout program, which the new Greek government initially pledged to get rid of. The new Greek finance minister has recently held talks in Berlin with German finance minister after the European Central Bank (ECB) restricted the Greek banks’ access to financing.
Greece was not the only eurozone country that received a warning. Mr Moscovici said that France, being the second-largest economy in the eurozone after Germany, must introduce “supplementary measures” to decrease its deficit and implement reforms. The EU estimates that if the country sticks to its reform efforts, it will grow 1 percent this year instead of 0.7 percent that were estimated at the end of last year.