Euro-Area Economy Hasn
The 15-nation euro area hasn't achieved all its expectations 10 years after its formation and now faces new challenges as commodity prices soar, the European Commission said.
“New and pressing challenges that were not apparent when EMU was devised have emerged,'' the Brussels-based commission said in a quarterly report published today. “Globalization, demographic change, higher energy and food prices and climate change are putting further strains on the growth potential of the euro-area economy and threaten price stability.''
The euro region is heading for its slowest economic expansion in three years as global expansion cools, oil prices soar and the euro's increase against the dollar makes exports less competitive. At the same time, inflation has reached a 16- year high, preventing the European Central Bank from cutting interest rates to bolster growth online payday loan.
The commission said there have been “substantial and lasting differences'' across member states in terms of inflation and labor costs, while structural reforms have been “less ambitious since the launch of the euro than in the run-up to it.''
At the same time, the euro is “often used as a scapegoat for poor economic performances that in reality result from inappropriate economic policies at the national level,'' according to the commission. “The policy agenda for the next decade will be marked by the emergence of new global challenges which will amplify the weaknesses of EMU.''