By Li Hongmei
A fragile recovery across the European Union is not expected to bear fruit until next year. And unemployment is likely to remain high in countries like Greece and Spain, and even rise in France, the Union's head of economic policy warned Tuesday.
Lawmakers in the European Parliament branded the autumn economic forecast by Olli Rehn, the European Union's commissioner for economics and monetary affairs, as evidence that the bloc's austerity policies were continuing to inflict unnecessary pain on millions of Europeans.
And some analysts warned that the forecasts might even be too optimistic in parts, saying that investors and business were likely to remain jittery about growth in many countries and that Europe could even face a sustained period of deflation - an affliction in which economic demand is so weak that prices actually decline, potentially making government debt reduction all the harder.
The report could increase pressure on the European Central Bank to take action to stimulate the economy when it meets on Thursday. Last week, official figures showed inflation falling to an annual rate of just 0.7 percent, well below the E.C.B.'s official target of about 2 percent.
Mr. Rehn's forecasts could bolster those members of the E.C.B.'s Governing Council who argue that action is needed to prevent the euro zone from becoming stuck in the same kind of economic stagnation that afflicted Japan for decades.
At a news conference Tuesday, Mr. Rehn said the risk of deflation was remote, but he declined to comment on whether the E.C.B. should lower interest rates.
Mr. Rehn said economic output for all of 2013 among the 17 countries that use the euro currency was expected shrink by 0.4 percent, but would grow by 1.1 percent next year. He also said that the 28 countries of the European Union would have an average of zero growth this year, but were expected to grow by 1.4 percent in 2014.
The forecasts also show rising joblessness in France now estimated at 11 percent and projected to rise next year to 11.2 percent.
That could further erode faith among European leaders in the ability of President Fran?ois Hollande of France to steer the second-largest economy in the euro zone to a robust recovery.
Mr. Rehn's forecast revised French growth down to 0.9 percent in 2014 from a forecast of 1.1 percent made back in the spring, while growth in Spain for 2014 was revised down to 0.5 percent from an earlier 0.9 percent projection.
Both countries are also on course to narrowly miss important interim deficit targets previously agreed to with the European Union, according to the outlook.
Jabbing back at Mr. Rehn from Paris, the French finance minister, Pierre Moscovici, said that Brussels officials were wrongly assuming that French policy would remain unchanged and failing to take into account the government's plans to cut spending.
But with the French public wearying of the seemingly never-ending lineup of new taxes since Mr. Hollande took office last year, and with municipal elections looming in 2014, it is not clear how much latitude the government has to address the budget deficit.
Even so, Mr. Rehn said he was "counting on these countries to undertake serious and effective economic reforms to boost competitiveness, growth and employment," having already given them both an extra two years to meet deficit targets. He was referring to France and Spain.
