If this email does not display properly, please click here Welcome to the first edition of our e-newsletter This new fortnightly newsletter from the European Commission's Directorate-General for Economic and Financial Affairs brings the latest EU economic and financial developments directly to your mailbox. The last year has moved the broad range of our activities to centre-stage in economic analysis and policy making in Europe. I hope that you will find this short summary with one-click links to further information on our website an informative and useful way of keeping up to date. You can manage your subscription via the link at the bottom of the mail. Marco Buti, Director-General Autumn forecast 2009-2011: EU economy on the road to a gradual recovery Economic Sentiment Indicator (ESI) continues its upward march Commission adopts Communication on a better functioning food supply chain in Europe Sustainability of public finances “an acute challenge” Annual Research Conference: the impact of the crisis on economic reform and economic paradigms Autumn forecast 2009-2011: EU economy on the road to a gradual recovery According to the Commission autumn economic forecasts published on 3 November 2009, economic recovery is now imminent and fears of a prolonged and deep recession have receded. Thanks in part to strong policy interventions, the EU economy is expected to emerge from recession in the second half of 2009. The near-term momentum will ease somewhat, however, as the impact of favourable temporary factors peters out, with a more gradual recovery foreseen in 2010-2011. EU and euro-area GDP are projected to grow by ¾% in 2010 and by 1½% in 2011. The road ahead is a challenging one. We must begin to look more towards the medium term, and consider how best to address the adverse effects that the crisis has had on labour markets, public finances and potential growth. Commissioner Joaquín Almunia Economic Sentiment Indicator (ESI) continues its upward march Rising to 86.0 (+3.4 points) in the EU and to 86.2 (+3.4) in the euro area, the ESI’s improvement in October is the seventh consecutive increase in both series since the trough of March 2009. Industry sentiment – and more optimistic production expectations in particular – was the largest contributor to the overall improvement in both areas. Confidence among consumers also improved, by 2 points in the EU and by 1 point in the euro area, mainly driven by a more optimistic general economic outlook. Commission adopts Communication on a better functioning food supply chain in Europe Recent food price developments have raised concerns regarding the functioning of the European food supply chain. The sharp decline in agricultural commodity prices of 2008 has failed so far to fully translate into lower food prices for consumers. The Communication analyses differences in the bargaining power and contractual relations between actors in the food supply chain and highlights the lack of price transparency. It proposes concrete policy actions and profiles the new European food price monitoring tool. Sustainability of public finances “an acute challenge” The recently released Sustainability Report 2009 concludes that fiscal policy in most Member States is not sustainable, and that drastic measures must be taken now. Without a reorientation of fiscal policy, the report puts the gross debt-to-GDP ratio for the EU as a whole at 100% as early as 2014. The report and its companion Communication are an update from 2006. They assess the sustainability of public finances in light of new, age-related expenditure projections and the ongoing financial crisis. Responding to the sustainability challenge, ministers at the ECOFIN Council of 20 October agreed that fiscal consolidation should start in all Member States by 2011 at the latest. Annual Research Conference: the impact of the crisis on economic reform and economic paradigms DG ECFIN’s Annual Research Conference was held on 15-16 October. Participants addressed how the crisis affects countries’ willingness to implement reforms, based on political, social and other factors. They also re-examined traditional economic paradigms which have been challenged by the financial crisis. Economic crisis in Europe: causes, consequences and responses This comprehensive report analyses the causes and consequences of the economic crisis, and puts the crisis in historical perspective. It also provides clear policy recommendations on re-structuring the financial sector, addressing macroeconomic imbalances and exiting government support measures. The report warns that unless measures are taken, potential GDP in the EU could fall to a permanently lower trajectory. Labour market and wage developments in 2008 Sustainability Report 2009 Pension schemes and pension projections in the EU-27 Member States, 2008-2060, Occasional Papers 56 A model-based analysis of the impact of cohesion policy expenditure 2000-06: simulations with the QUEST III endogenous R&D model, Economic Papers 387 Growth and economic crises in Turkey: leaving behind a turbulent past? Economic Papers 386 US household saving: how far will it rise? Country Focus 9 Upcoming: Product Market Review 2009 7-8 November St. Andrews, Scotland G20 Finance Ministers Meeting 9-10 November Brussels, Belgium Eurogroup and Ecofin Meeting ECFIN/D/2009/027: "Study on the effects of the global crisis on the financial sector in candidate and potential candidate countries" (deadline: 17/11/2009 - 16:00) ECFIN/B/2009/007: "Framework service contract for the supply of economic studies in the area of the structural performance of the European economies, structural reforms and the economic evaluation of community policies" (deadline: 16/11/2009 - 16:00) Privacy Statement | Directorate-General for Economic and Financial Affairs