European Commission reduces growth forecast

THE European Commission sharply reduced its growth forecast for this year as the cool winds of the slowing global economy affects both the EU and eurozone areas.

Governments and citizens need to be realistic about the situation, with countries keeping within their budgets and workers keeping their wage demands in line with increases in productivity, Economic and Monetary Affairs Commissioner Joaquim Almunia said.

Economic growth is expected to slow to 2% in the EU and 1.8% in the euro area for 2008, which is 0.4 percentage points less than last November’s forecast.