EU’s Gentiloni optimistic about Europe avoiding a recession

Europe is currently confronting a “double crisis,” but according to Paolo Gentiloni, the European Commissioner for economic affairs, the region has the potential to overcome it and avoid a recession. In an interview with CNBC on Saturday, Gentiloni stated that the crisis stems from the geopolitical impact of Russia’s invasion of Ukraine and the subsequent economic repercussions on Europe.

Gentiloni acknowledged that the crisis has affected the United States and the world as a whole from a geopolitical perspective. However, he emphasized that Europe and Germany, in particular, have felt the economic impact of the crisis.

Russia’s invasion of Ukraine in February last year led to concerns of a significant economic slowdown in Europe. Nevertheless, the region has since diversified its energy sources, reducing reliance on Russia. Additionally, governments have provided relief to consumers facing high energy costs.

According to the International Monetary Fund (IMF), the euro area experienced a growth rate of 3.5% in 2022. The IMF projects a growth rate of 0.8% for the euro zone this year and 1.4% in 2024.

Gentiloni proudly shared that Europe had a successful year in 2022, with higher growth than the United States and China. While acknowledging a slowdown in the last quarter of 2022, Gentiloni stressed that it is not yet a recession and expressed confidence in Europe’s ability to avoid one.

The European Commission is set to release new economic forecasts for the entire region on September 11. These forecasts will provide insight into the growth prospects of the area.

However, recent economic data has raised concerns about a slowdown. European business activity declined in August, reaching its lowest level since November 2020.

Inflation has eased in recent months, but it remains stable at 5.3% in August, well above the European Central Bank’s target of 2%.

Gentiloni highlighted the challenge of achieving energy independence as a factor contributing to the economic slowdown in Europe. He emphasized its impact on families, as it has led to increased inflation.