Eurozone: Varoufakis discusses the 'greatest beneficiary' in 2018
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Despite the EU’s economy set to bounce back faster than expected, Brussels chiefs have urged the bloc to “redouble our vaccination” efforts amid concerns over the Delta strain. The EU’s Summer Economic Forecast suggested its economy would grow by 4.8 percent this year and 4.5 percent in 2022. This is an 0.6 percent increase on previous forecasts made by European Commission economists.
But a stark warning has been issued that this good work could all be undone if the rollout of the vaccine across the Continent isn’t accelerated further.
Commission vice-president Valdis Dombrovskis said: “There must be no let-up in the race to get Europeans vaccinated so we can keep variants at bay.”
Economy commissioner Paolo Gentiloni added: “To keep the recovery on track, it is essential to maintain policy support as long as needed.
“Crucially, we must redouble our vaccination efforts, building on the impressive progress made in recent months: the spread of the Delta variant is a stark reminder that we have not yet emerged from the shadow of the pandemic.”
The initial rollout of the EU’s vaccine scheme was at a snail’s pace, hampered by the lack of supplies secured by Brussels.
It has begun to gather pace but is still lagging behind the likes of Britain, Israel and the US.
The EU’s report highlights: “Virtually all Member States have seen a fall in new infections, but the emergence of the Delta variant is raising concerns. By the cut-off date of this forecast (June 28), Portugal had experienced a steep increase in new infections, dominated by the spread of the Delta variant.
“Although at relatively low levels compared to the records seen between October 2020 and February 2021, the number of confirmed new infections in the country nearly tripled since mid-May.
“Meanwhile, vaccination campaigns continue to progress at a fast pace across the EU. By the cut-off date of this forecast, over 60 percent of the adult population in the EU had received at least one vaccine dose. This share doubled since the cut-off date of the Spring Forecast (30 April). However, the share of the total population that has been fully vaccinated – at around 33 percent – was still below the US (46 percent) and the UK (48 percent).”
Much of the EU’s optimism is largely due to the reopening of national economies in the second quarter after months of lockdown, the Commission said.
But eurocrats insist the risks about the outlook remained high as a result of spreading variants.
A faster vaccine rollout is seen as a vital measure in avoiding restrictions being reintroduced in the future to curb the spread of the coronavirus.
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Despite the concerns, Brussels revised its growth forecasts upwards for its three largest economies.
France’s economy is set to grow by six percent, Italy’s by five percent and Germany’s by 3.5 percent.
Next year growth will accelerate to 4.6 percent in Germany and is expected to remain strong at both 4.2 percent in France and Italy.
Inflation has emerged as another major concern for economists as global economic growth continues after coronavirus lockdowns.
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It is expected to reach 1.9 percent this year in the eurozone, up from the 1.7 percent estimated by the Commission in May.
Next year, it is expected to slow to 1.4 percent.
The European Central Bank has targeted to maintain eurozone inflation just below two percent.
However, the Commission warned: “Inflation may turn out higher than forecast, if supply constraints are more persistent and price pressures are passed on to consumer prices more strongly.”
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