EU Commission's 2012 forecasts for the European Economy : = "Turning point" ?

- "Confidence ...seems to have Begun Improving Recently" on the EU, according to the latest Data just published by the European Commission, which  finds "signs of Stabilisation" concerning EU's "Financial Markets", expects notable "Growth to resume in the 2nd half of this year (2012)", and observes that EU "expands" its "Industrial output", while USA its "Consumption", (according to the Difference of Strategies used), etc. So that, added also to the "Decisive steps for the comprehensive crisis response" already "taken by Europe recently", this may be a Positive "Turning point of the trend", depending also on decisions to be taken on forthcoming EU Summits, particularly from March.
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Germany and France, as well as the UK (thanks also to the Olympic games, as EUCom. notes), are due to continue Growing steadily during 2012, for +0,6% and +0,4% (according to the French Government +0,5%), and +0,6%, respectively, together with Luxembourg (+0,7%), Austria (+0,7%), Ireland (+0,5%), Finland (+0,8%), Malta (+1%), Slovakia (+1,2%), Estonia (+1,2%) from €uroarea, and Denmark (+1%), Bulgaria (+1,4%), Romania (+1,6), Latvia (+2,1%), Lithuania (+2,3%), and Poland (+2,5%), from the rest of EU Countries. Bad surprises being Greek economy's recession of -4,4%, in order to pay loans and interests for notoriously excessive State agents' salaries/retirements, and Portugal's - 3,3%, according to recovery Plans, (which, however, don't reach the .. Double-digit numbers of Baltic Countries' Past recession during the 2009 Global Crisis :  from -14,3% to -17,7% !)..

But, what is most important, given the Sustainable Growth Model adopted by the main EU Countries focused on Investment for Productivity, is that Growth starting now  is driven by Exports' surplus, (even vis a vis the advanced USA economy, as also other recent Data contained in a relevant "€uroFora"'s earlier NewsReport begun to clearly indicate).

F.ex., in the case of France, EUCom. notes that, already, "in the last quarter of 2011, GDP Growth proved much more Resilient than had been forecast ...: . .Investment rebounded to +²0.9%", while, at the same time, "Net Exports were Strong", already in 2011, and "Net Trade ....would have an overall Positive contribution to growth in 2012" too. Similarly, Austria's "robust growth" recently was due to 'Strong Exports, Investment, exports, Investment, and, not least, Public (but Not Private) consumption", according to EUCom. Germany's "continued Investment in machinery and equipment" and "Dynamic Exports", also explained its recent Boom, together with an internal augmentation of Employment according to EUCom, but, in 2012 it's due to zig-zag much more according to the ups and downs of Exports, than a still "benign" private consumption, revealing what is its essential driving force. Same even more in the UK, where "in 2011, Growth was largely driven by External Demand", which " is again expected to be the strongest Driver of GDP growth in 2012", according to developments in its "main Export markets". Slovakia's "economic activity (was) Driven by Growth in Exports in Durable Manufacturing goods", and, while Internal "Consumption" remains "low", its "Growth largely dependent on External demand", 4/5 being destinated to EU's Single Market.  Finland too depends very much on "External Demand"'s ups and downs, but "a Positive impact on Growth" is expected also by "Investment" during "on-going Structural Changes within some of the main Finnish Industries", most of whom play a key role for "Finnish Exports". Estonia's 2011 entry in €uroarea coincided with Growth based on "remarkable Export performance", as well as "fixed Investment ..targeted at increasing Productivity", and 2012 outlook is due to follow mainly the ups and downs of "External demand", (as; f.ex. the "Export-oriented Electronics sector" already showed), but also rely on "robust Infrastructure Investment ...(with a) higher absorption of EU Structural Funds".  (etc).

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In particular :

      According to EU Commission's cautious interim Forecasts, (which "decided to extend the coverage from the 7 biggest Members States to all 27 Member States"), "the Key-messages are the following :"

- "We are seeing signs of Stabilisation" in the EU, while "World Trade Growth ... is expected to Recover ...gradually in 2012" despite "the continuation of the temporary weakening of Global Demand". So that, even if "GDP of the EU is expected to remain Unchanged in 2012", nevertheless, "the Global Purchasing Managers Index (PMI) ...continues to indicate modest Expansion of Industrial output" in the EU.

The situation is sightly Differend in some other "Advanced economies", (as in) the U.S., (where) recently (it was) ...Consumption (that) rebounded".

" ..in Japan ...the perspective of moderate Growth in 2012 remains intact".
"Many Emerging market economies continue to do (even) Better", so that, "Overall, the Global economy –excluding the EU - is expected to Grow by +4.3% in 2012".

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"Financial markets remain Fragile still, but there are also signs of Stabilisation".
"Sovereign yield Spreads have Eased in several countries, ... spreads have come Down since mid-November in recognition of the determined Measures by vulnerable countries and at European level. The Successful sovereign bond auctions are further Evidence".

The real situation may be even Better Today, since, "as regards credit conditions for the private sector,... the data were collected until December, so may not fully take into account Latest Improvements"

"..New liquidity Measures by the ECB have contributed to the improvement, as Banks have now access to Longer maturity Funding, and can use a Wider Range of eligible collateral. ...Credit conditions are not expected to constrain Investment and Consumption over the forecast horizon.

"Moreover, the European Banking Authority reported earlier this month that the reCapitalisation plans do not point to massive deleveraging, as some had initially feared"
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>>> "...Confidence ...seems to have Begun Improving Recently"

"The Commission's Economic Sentiment Indicator (ESI)  ... in January 2012, ..rose for the first time since May 2011".

"This (may) constitute a Turning point in Confidence, ...depend(ing) on the policy decisions at national and EU level".

+ "The EU composite PMI readings have been slightly more Positive, showing a gradual Increase of the index since November" 2011. "On January (2012), the index stood Above the threshold of 50 points, signalling a marginal Increase in economic Activity in the EU. The February reading, which came out yesterday, seems in line".
So that a short, "...expected slowdown will be mild and temporary", before "the Turnaround of the trend", expected during 2012.
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"Given these preconditions, our growth Forecast looks as follows :"

=> "...we expect Growth to resume in the 2nd half of this year (2012)"
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"...uncertainty related to the sovereign-Debt crisis will gradually Fade over the forecast horizon".
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- "...Inflation has Decreased ... gradually", despite "récent increases of indirect taxes".It "is expected to trend on a slowly Decreasing path over the forecast horizon. For 2012 as a whole, the HICP inflation rate is now projected ....2.1% in the €uro area.
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Last but ot least : "Europe has recently taken decisive steps for the comprehensive crisis response, in 5 points" :

1) "..uncertainty about a second programme for Greece has been removed.."

2) "..Good, but not yet sufficient, progress has been made to establish an adequate Firewall against contagion in sovereign-debt markets. I believe that will be resolved next week in the (EU) Summit".

3) "..a better Capitalisation of EU Banks is well underway and funding stress has eased", (thanks also to ECB's adequate action).

4) "..The framework for economic Governance in the euro area has been reformed and is being implemented as it should"

5) "..structural Reforms to enhance our growth potential are being undertaken. ....We will... bring together the Growth-enhancing policies across the EU, both at national and at EU level".

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+ Meanwhile, other recently published data show that €uroArea's Countries succeeded in 2011 to drastically ...halve their Foreign Trade Deficit compared to the Past of 2010, Reducing it from 14,7 Billions € to 7,7 Billions €, (i.e.  almost - 50% !), probably due, at least partly, also to Competitiveness' gains.

On the contrary to the other, Non-€uro, 10 EU Countries' Deficit was slighty Reduced just from 159 to 152 Billions €. In overall,  EU's 27 reduced their past Foreign Trade Deficit with China from 155 to 145 Billions €, and with Japan from 20 to 17 Billions €. during 2011.

Only EU's Foreign Trade Deficits with Russia and Norway augmented in 2011, ( from 66 to 82, and from 33 to 42 Billions €, respectively), apparently due to Energy imports. A need that recently growing frindings of Oil/Gas around EU Member Cyprus might soon start to diminish in the Future.. Moreover, Norway is part of the European Economic Area, while neighbouring and largely European Country Russia has a close strategic partnership with the EU, so that it's difficult to count them as being totaly distinct from -and/or out of-Europe...

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 (NDLR : DraftNews, as already sent earlier to "EuroFora"s Subscribers/Donors. A more accurate, full Final Version might be published asap.)

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