The European Union has slashed its economic growth estimate for the 28-nation bloc, indicating the current recovery will remain sluggish until 2016. Weak France and Italy are proving a drag on higher growth.
According to the European Commission's autumn economic forecast released Tuesday, output in the 28-nation bloc is expected to grow by only 1.3 percent this year, instead of an earlier prediction of 1.6 percent.If you're a Swede or Norwegian, breathe a little easier, and spend your own currency;
For the 18 nations that use the single currency, the outlook by the EU executive is even bleaker, forecasting economic expansion to reach just 0.8 percent, rather than 1.2 percent, as predicted earlier.Which reminds us of the wisdom of the late Milton Friedman, who said in 1999 of the Euro;
“It seems to me that Europe, especially with the addition of more countries, is becoming ever-more susceptible to any asymmetric shock. Sooner or later, when the global economy hits a real bump, Europe’s internal contradictions will tear it apart.”