Rehn predicts ‘turning of tide’ from mild recession in coming months

Europe is in a mild recession at the moment, Economics Commissioner Olli Rehn said as Eurostat cut its estimate for growth in the EU and eurozone for last year, suggesting the much-forecasted double dip.

Mr Rehn’s statement in Paris suggests that the drop in growth in the last quarter of last year is continuing in the first quarter of 2012, although he said there were signs of stabilisation in the economy.

Continuing the positive trend, Mr Rehn said the banking sector was recovering and the risk of a credit crunch in the real economy had been prevented, stress in sovereign bond markets had eased and this had all helped to boost investor confidence.