Rehn predicts moderate recession in EU this year

Europe's Economics Commissioner Olli Rehn has said there will be a moderate recession across Europe in the first half of 2012.

He made the remarks at a news conference following a two-day meeting of EU finance ministers focused on helping Greece and Hungary.

The Economics Commisisoner said several factors point toward a moderate recession in the first half of this year,but also said there has been an improvement in market sentiment in the past couple of weeks as the cost of borrowing for EU states decreased.

The Commissioner has warned that economic recovery is now likely to be postponed until the second half of 2012.

He has also called on Spain to meet its budget targets for this year - a move which will mean further cutbacks there.

Commissioner Rehn made his remarks at the end of a meeting of EU finance Minister's during which the green light was given for sanctions against Hungary for failing to meet its budget targets.

Meanwhile, Greece has been warned to implement further austerity measures or risk not receiving its second bailout loan in March.