Eurozone economy to enter slow recession

andres del risco

The EU has predicted that the Eurozone’s economy will shrink over the next 12 months.

The European Commission estimated that the economy would contract by around 0.3% over the coming year, quashing previous predictions that the economy would take an upward turn.

In November last year, the EU suggested that the economy would grow by 0.5%. However, it appears that the Union may have been too optimistic in its predictions.

The EU warned that 17 of its member countries would enter a ‘mild’ recession, which could deter potential foreign investment.

Greece proved to be the biggest drain on Europe’s recovery as the Eurozone economy is now expected to see a 4.4% decline in output this year.

The decline in Portugal’s economy is also set to put further strain on the fortune’s of the EU, as it is expected to contract even further.

Only Greece and Portugal were anticipated to have slumps in their economic output when previous estimations where made last winter. Now, Belgium, Spain, Italy, Cyprus, the Netherlands and Slovenia have all been added to the list.

The Commission said in a statement: “The unexpected stalling of the recovery in late 2011 is set to extend into the first two quarters of 2012.”

The Commission predicted that the wider economy of the 27-nation EU would not suffer the same fate as other European countries.

Transferring money to the Eurozone

If you are looking to invest in the Eurozone, think carefully about how you will be transferring money to the area. Foreign currency exchange rates quoted by banks are almost always worse than the exchange rates available through specialist currency dealers.

So if you are looking to send money overseas, to the Eurozone for example – be sure to compare the market before you buy your overseas currency.

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