EU: Eurozone recession to be worse, rebound slower
BRUSSELS (AP) — Europe’s economy is still reeling and unemployment could remain high for years despite the progress made in solving the debt crisis, the European Union warned Wednesday, as it downgraded next year’s forecasts for the 27-country bloc.
The European Commission, the executive arm of the EU, on Wednesday revised down its forecast for the region’s gross domestic product, which it now expects to grow by just 0.4 percent in 2013, compared to its expectations this spring of 1.3 percent growth.
The commission had previously expected the 17 countries that use the euro to find its footing next year, with 1 percent growth. Now it predicts only a 0.1 percent uptick.
The report also suggests that unemployment won’t start falling until 2014 — and then only slightly.
‘‘Europe is going through a difficult process of macroeconomic rebalancing and adjustment, which will last for some time still,’’ Olli Rehn, the EU’s economic and monetary affairs commissioner, told reporters. ‘‘Market stress has been reduced but there is certainly no room for complacency.’’
The downbeat forecast helped erase an initial euphoria in markets over President Barack Obama’s re-election
, with France’s CAC-40 stock index and the DAX in Germany both down 1.5 percent in afternoon trading Wednesday.