Despite the Greek debt crisis, both the European Union and the 16-member eurozone will see stronger growth than previously estimated, but still lag behind other major economies.
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European Commissioner for Economic and Monetary Affairs Olli Rehn talks to the media in Brussels, capital of Belgium, May 5, 2010
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According to the latest forecast of the European Commission released on Wednesday, the EU's economy will grow by 1 percent in 2010, while that of the eurozone will reach 0.9 percent, stronger than the 0.7 percent predicted in the autumn forecast last year.
The forecast confirmed that economic recovery is in progress in the 27 -member EU after the deepest recession in its history.
In 2011, the EU economy is set to grow 1.75 percent, while the eurozone is going to rise 1.5 percent, according to the forecast.
The continued growth can be mainly contributed to stronger external environment, the European Commission said.
However, the EU's public finances will remain under pressure in the coming years. The public deficit of the EU will surge to 7.25 percent of the GDP, and will only improve slightly in 2011 to around 6.5 percent.
Moreover, the public debt ratio is projected to reach 84 percent for the EU and over 88.5 percent for the eurozone, far above the 60 percent ceiling set by the EU Stability and Growth Pact.
The current trends in public debt may jeopardise long-term stainability given the combination of sustained large deficits, the European Commission said.
"The improved outlook for economic growth this year is good news for Europe," EU Commissioner for Economic and Monetary Affairs Olli Rehn said.
"We must now ensure that growth will not be derailed by risks related to financial stability," he said, adding "sustainable growth calls for determined fiscal consolidation efforts and reforms that enhance productivity and employment."
Besides facing high public deficit and debt, the EU's economic growth also lags behind other major economies, such as the United States, Japan and China.
According to the EU's forecasts, the U.S. economy is going to grow by 2.8 percent in 2010 and 2.5 percent in 2011, while Japan's economy is estimated to expand by 2.1 percent in 2010 and 1.5 percent in 2011. China's economic is forecast to rise by 10.3 percent in 2010 and 9.4 percent in 2011.
The European Commission publishes two major economic forecasts in spring and autumn each year, with two other interim forecasts in February and September for seven largest EU economies./.