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Michael Probst/AP

Brussels paints bleak picture for European economic recovery

The European Commission’s new review lowers its expectation of economic growth, which will be flat in the third quarter.

THE EUROPEAN COMMISSION has lowered its expectation for the growth of the European economy – saying the crisis on the world’s financial markets is taking its toll on Europe’s recovery.

The Commission believes economic output in the union will now be just 0.2 per cent for each of the next two quarters – with growth at just 0.1 per cent in the fourth quarter in the Eurozone.

While both the Union and the Eurozone will both meet their annual growth targets, their growth will largely have come in the first quarter, with the economy grinding almost totally to a halt towards the end of the year.

Unsurprisingly, Germany will be the engine for the growth – with its economy expected to grow by 2.9 per cent this year by Brussels’ expectations. There was no hard data for Ireland in the report.

Separately this afternoon, the ECB said it was going to step up efforts to lend dollars to banks in the euro area, in three separate three-month loans to ensure they had enough US cash to get through the rest of the year.

The move – which comes in coordination with moves from the central banks of England, Japan and Switzerland – comes as a sign that some banks are now struggling to gain access to dollars on the regular money markets, as US investors grow more fearful of Europe’s banking sector.

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7 Comments
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    Mute Daniel O'Sullivan
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    Sep 15th 2011, 3:42 PM

    think its time Europe called it a day. there doesn’t seem to be any recovery.everytime they give us good news two weeks later its bad news.

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    Mute Alco Holic
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    Sep 15th 2011, 6:54 PM

    Looks like ive a better chance of Recovery, Hic!…

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    Mute Tony Stamper
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    Sep 15th 2011, 4:11 PM

    Is it not more that Europe is dragging the rest of the world down. The Euro is a dead duck, everyone knows that and pretending that it can be resolved at this stage is only allowing more potential to build up. Yes splitting it, will be painful but at this stage there is no good options.

    Does the EU want to survive no matter what the cost or damage to the global economy and European stability or does it want to step back from the madness that the Euro and last 3 treaties entailed.

    What the next step will probably be is forcing the weaker countries out. People will say that they can’t do that yadayadayada, but they haven’t exactly been taking notice of treaties so far have they. Between EU survival or get rid of the Piigs, it will be an easy choice. The problem is that the French, German and Austrian banks are in a shocking state, can they survive as well.

    I was never in favour of the Euro or the last few treaties. I was happy with a community of countries working closely together, not the one superstate approach but I never felt that it would all fall apart so quickly and at such immeasurable risk as it is now. There really is not good options any more, just less bad ones. Time to face reality!

    Reality is knocking and its pissed off with Brussels.

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    Mute Pòl O Cadhla
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    Sep 15th 2011, 7:34 PM

    They will incorporate a dual currency, or a poor man’s Euro so to speak for Ireland, Greece etc. I’m still not sure why Irish people constantly give out about the EU. The majority of Irish people choose to give away their sovereignty, their laws and their freedom to the EU. Throughout many many years they were told in treaties “Hi, we are the EU. We are conscious that you are thick Paddy’s and will always do what ye are told. So lads, will ye sign another treaty and believe the lies from our puppets…sorry, um I mean your elected politicians” Get on with it Ireland, just stop moaning and lay down like good poodles

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    Mute Tony Stamper
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    Sep 15th 2011, 7:58 PM

    Calling a spade a spade there Pól but it is the truth. I suppose that lots of European countries also turned their backs on democracy and sovereignty but that does not lessen that this country voted for lunatic policies and lunatic Govt’s for 80 years. Well we are all reaping the harvest now.

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    Mute Frank Enstein
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    Sep 15th 2011, 3:51 PM

    And then over on ZeroHedge this story:

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    Mute Frank Enstein
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    Sep 15th 2011, 4:29 PM

    It seems that it lasted just a few hours.. Just in …….
    http://www.zerohedge.com/news/global-central-bank-intervention-impact-total-retrace

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