EU chiefs see ‘uncertainty’ as eurozone growth outlook is cut

European Commission chiefs have spoken of the “uncertainty” that lies ahead following the election of Donald Trump, on the day Brussels released new growth forecasts which showed it expected the economic recovery across the eurozone to remain tepid, at best.

EU economics chief Pierre Moscovici said he was “confident the US will remain a strong partner” for the EU, while trade commissioner Cecilia Malmstrom said it was “clear that there will be a natural break” in EU-US trade negotiations after the election.

The Commission’s vice-president for jobs and growth, former Finnish prime minister Jyrki Katainen, said “the only thing that is sure now is uncertainty”.

The Commission slashed its 2017 economic growth forecasts for the eurozone as it warned of instability caused by the UK’s decision to leave the EU and the surge of anti-globalisation and populism around the world.

It also pared its forecast for Irish GDP growth to 3.6% next year, and projects the Irish economy will grow by 3.5% in 2018.

The commission downgraded its 2017 growth forecasts for Germany, France, Italy and Spain — the eurozone’s four largest economies.

Eurozone GDP will rise by 1.5% next year, 0.3 percentage points lower than it forecast in May.

The 19-nation region’s inflation rate will average 0.3% this year and 1.4% in 2017 and 2018, well below the ECB’s goal of just below 2%.

The projections were prepared before the US presidential election result was known.

The EU is seeking solutions to Brexit, threats from an aggressive Vladimir Putin to the bloc’s east and south, and the flow of migrants from the war-ravaged Middle East.

It’s also struggling to shake off the effects of its debt crisis more than six years since Greece’s first bailout sent shock waves across the bloc.

The uncertainty may now be heightened by Mr Trump’s victory in the US vote.

“There are of course expectations on this side of the Atlantic in terms of the new president,” Mr Moscovici told reporters in Brussels.

“We’ve talked about global challenges, security, the economy, trade, climate change — challenges that can only be addressed if the US and Europe work together.”

German chancellor Angela Merkel said close co-operation with the future President Trump must be on the basis of “shared values: democracy, freedom, respect for human dignity — and dignity, irrespective of origin, colour, religion, gender, sexual orientation or political attitude”.

Hungarian premier Viktor Orbán said on Facebook that Mr Trump’s victory was “great news” and proved “democracy is still alive”.

Additional reporting by Bloomberg