The EU's economy will this year rise only by half of what its experts predicted and reach a "stand still" in 2009, according to a fresh forecast by the European Commission.
"GDP is expected to be 1.4 percent this year in the EU and 1.2 percent in the euro area. Less than half the outcome of 2006 and 2007," EU economy commissioner Joaquin Almunia said on Monday as he was presenting the commission's autumn report on the economy to journalists in Brussels.
With the predicted figures for 2009 at a record low – the EU's GDP at 0.2 percent and 16-strong eurozone's at 0.1 percent - the "horizon is as dark as November weather in Brussels," he added.
Three EU countries are set to end up with economic contraction already this year: Ireland (-1.6% GDP), Estonia (-1.3%) and Latvia (-0.8%), with the UK (-1.0%) and Spain (-0.2%) set to join the list next year.
Most large EU economies are set to see minimum or no growth, a situation affecting France and Italy already this year, and Germany mainly in 2009. Commissioner Almunia said: "The bottom will be reached in mid 2009 and the recovery will start gradually from there."
"Our aim indeed is to have as short a slowdown as possible, to limit the impact of this slowdown on jobs, to prepare the economy for a sound recovery and not to commit again the same errors that led to the present financial crisis," commented Mr Almunia.
But the figures suggest that the market turbulence and its impact on economic growth in EU states will in fact have a severe impact on jobs, with the the number of Europeans out of work expected to rise from 7.5 percent recorded in 2007 to 8.7 percent in 2009.
Spain remains the country with the highest unemployment. Brussels predicts that by next year, it will reach almost 14 percent and in 2010 15.5 percent. Slovakia, Greece, Latvia and France will follow Spain with the next highest number of the jobless people.
In a bid to escape the crisis, commissioner Almunia urged for investment by member states as the possibilities of the EU budget are limited.
He also pointed out that inflation however is now moving in a more favourable direction. In 2009, the EU's consumer prices growth should slow down from this year's 3.9 percent to 2.4 percent, and in 2010 slow further still to 2.2 percent.