A cyclist drives past the Eiffel Tower overnight after a light snowfall.
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LONDON – The European Commission has assessed its outlook for the eurozone economy more negatively and has forecast a lower growth rate for the region in 2021 as governments grapple with new variants of the coronavirus.
The Brussels-based institution expects the 19-member region to grow by 3.8% this year. In November, it had forecast a GDP rate of 4.2% (gross domestic product) for 2021.
The latest projections come at a difficult time for the European Union as the introduction of Covid vaccines faces production, delivery and bureaucracy issues. At the same time, European governments are concerned about mutations in the virus, which are believed to be more contagious. The longer the health emergency drags on, the longer EU countries have to extend social restrictions and lockdowns, which puts a strain on the economy.
“We remain in the painful grip of the pandemic, the social and economic consequences of which are all too obvious. But at the end of the tunnel there is finally light,” said Paolo Gentiloni, economic commissioner, in a statement on Thursday in relation to vaccine rollouts.
For the future, the European Commission expects GDP in the euro area of 3.8% in 2022, after a GDP rate of 3% was forecast for the next year in November.
In the individual countries, Germany will grow by 3.2% in 2021, after having shrunk by 5% in 2020. In France, GDP is expected to reach 5.5% this year, after falling more than 8% in 2020.
The European Commission’s forecasts assume that social restrictions will be eased slightly in the second quarter of 2021, but that some sectoral measures will still be taken in 2022.