Spanish first Deputy Prime Minister and Minister of Economy, Nadia Calvino (L), speaks with European Commissioner for Economy Paolo Gentiloni (C) and European Commission Executive Vice-President Valdis Dombrovskis (R) at the start of an Eurogroup finance ministers meeting in Brussels, Belgium, 08 November 2023. EFE/EPA/OLIVIER HOSLET

Eurogroup acknowledges economy is losing momentum, but rules out deep recession

Brussels, Nov 8 (EFE).- European finance ministers acknowledged on Wednesday that economic growth has slowed in recent months, but ruled out that the economy is heading for a deep recession.

“The euro area continues to remain resilient and there is no reason to expect a deep or a protracted recession,” said Paschal Donohoe, president of the Eurogroup, the informal body that brings together ministers from eurozone countries, at the end of a meeting where ministers reviewed the state of the European economy.

He added that the group sees “risks” due to “developments that are taking place elsewhere in the world”, and there has also been “a confirmation of some loss of momentum in our economy,” the data also reflect that inflation is falling and that the labor market remains strong, he explained.

In the same direction, European Commission Vice President Valdis Dombrovskis, told reporters ” it’s clear that currently we are in a period of economic weakness.”

However, he foresees a “modest rebound” next year and that certain strengths of the European economy will be maintained.

Economy Commissioner Paolo Gentiloni said there was “a good and resilient labor market despite some signs of cooling.”

The ministers discussed the latest figures from the EU’s statistics office, Eurostat, which show an employment rate of 6.5% in September and point to a 0.1% contraction in GDP in the third quarter of the year, largely due to a decline of the same magnitude seen in Germany, the eurozone’s economic engine.

But the data also reflect a drop in inflation to 2.9% in October, its lowest level since August 2021, a trend that Brussels expects to continue in the coming months.

“It’s a little bit early to understand which landing we will have because for now what is clear is that we avoided a severe recession – overall we avoided recession in the European Union — but we still have figures on growth that are very, very low,” Gentiloni said. EFE