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European Commission - Economic and Financial AffairsEuropean Commission - Economic and Financial Affairs
EU interim economic forecast: fragile recovery has begun
- Commission creates new Greece Task Force in DG ECFIN
- Camdessus report on EIB proposes strengthening EU external lending
- Council nominates Vítor Constâncio for vice-president of the European Central Bank
- Rebound in economic sentiment slows in February
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EU interim economic forecast: fragile recovery has begun

The longest and deepest recession in EU history came to an end as real GDP in the EU started to grow again in the third quarter of 2009. However, as predicted in the autumn forecast, growth eased in the fourth quarter of 2009. Looking ahead and based on an update of the outlook for the seven largest EU Member States, the economy is still projected to expand by an anaemic 0.7% in both the EU and the euro area in 2010. Weaker housing investments and continuing balance-sheet adjustment across sectors are expected to restrain EU growth in 2010. Unemployment remains on the rise and would thus dampen private consumption as well. Inflation projections remain largely unchanged at 1.4% and 1.1% in the EU and the euro area respectively.

We need to work on two fronts: the economic recovery and the consolidation of our public finances. This is necessary for sustainable growth and job creation.

European Commissioner for Economic and Monetary Affairs Olli Rehn
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Commission creates new Greece Task Force in DG ECFIN

DG ECFIN, in agreement with Commissioner Rehn, has created a dedicated task force with extra staff to monitor the Greek fiscal situation. Acting Deputy Director-General Servaas Deroose - appointed last week - will lead the task force, which will work closely with other Commission departments and with the ECB and IMF. The move comes in response to the severity of the Greek crisis and concern about the wider risks associated with growing imbalances and divergences inside the euro area. It also reflects the broader need to enhance surveillance efforts and strengthen governance in the euro area. The task force was in Athens this week to meet with Greek officials. Commissioner Rehn is also expected to visit Greece in the coming weeks.
Camdessus report on EIB proposes strengthening EU external lending

The Commission and the EIB yesterday welcomed a report into the EIB's external financing activity by a committee of “wise persons” chaired by former IMF Managing Director Michel Camdessus. It proposes an extra EUR 2 billion in EIB loans for projects that further the fight against climate change. The current EIB external mandate for lending beyond the EU's borders provides for a maximum of EUR 25.8 billion under EU guarantee for the period 2007-2013. The report also suggests longer-term options to consolidate the delivery of financial aid in support of EU external policies. The Commission will submit a legislative proposal for amendments to the current mandate by 30 April 2010 drawing upon the report.
Council nominates Vítor Constâncio for vice-president of the European Central Bank

At its meeting on 16 February, the ECOFIN Council adopted a recommendation to nominate Vítor Constâncio as vice-president of the European Central Bank. The recommendation will be submitted to EU leaders at the European Council after consulting the European Parliament and the governing council of the ECB. The new vice-president will replace Lucas Papademos, whose term of office expires on 31 May.
Rebound in economic sentiment slows in February

In February, the Economic Sentiment Indicator (ESI) remained broadly unchanged, hovering at 97.4 (up by 0.2 points) in the EU and at 95.9 (down by 0.1 points) in the euro area. After 10 months of uninterrupted improvement, the rebound appears to have lost momentum. But the ESI is now not far off its long-term average, especially in the EU. The Business Climate Indicator (BCI) for the euro area rose for the eleventh month in a row, reflecting overall improvement in industry, although the relatively low level of the indicator suggests that year-on-year growth in industrial production in January 2010 was still negative. The increase in the BCI reflects managers' positive opinion about both order books and production expectations.

Cross-country study: Economic policy challenges in the Baltics. Rebalancing in an uncertain environment, Occasional Paper 58
This study reviews the process of economic transformation in Estonia, Latvia and Lithuania from the early years of independence to the current downturn. It examines macroeconomic and budgetary developments and policy, real and financial integration with the rest of the EU and medium-term challenges to optimise growth prospects. It draws policy lessons for small open economies undergoing rapid real and financial convergence, including the positive contribution which pursuing prudent policies over the medium term can make, including in times of crisis.

Market Integration and Technological Leadership in Europe, Economic Paper 403
Business Cycle Synchronization in Europe: Evidence from the Scandinavian Currency Union, Economic Paper 402
Upcoming: Unexpected changes in tax revenues and the stabilisation function of fiscal policy, Economic Paper 404
Upcoming: EU labour market behaviour during the Great Recession, Economic Paper 405
Agenda Calls
12 March
Seminar: Six years after EU enlargement – Austria and its Eastern neighbours
15-16 March
Eurogroup/ECOFIN Council
25-26 March Brussels Spring European Council
25-26 May
Brussels Economic Forum 2010
Call for papers – UK country seminar (deadline: 7 March 2010)
Economics Seminar Programme (no closing date)
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Directorate-General for Economic and Financial Affairs