European Commission: Downturn and deficits ‘will persist’

<p>The European Commission has forecast that the eurozone downturn and its deficits will persist into 2014.</p>

The main eurozone stock indices have recovered lost ground after a disappointing week of trading today (February 22nd), but the European Commission has dealt another blow to the struggling single currency region.

It has stated that the 17-member bloc's economic downturn and the deficits its nations are grappling with are set to persist, as struggling nations France, Portugal and Spain have failed to cut overspending.

The Spanish deficit was more than ten per cent of gross domestic product (GDP) in 2012, which is above the agreed 6.3 per cent, while it is set to remain over this target until 2014.

Delivering the Commission's winter forecast, vice-president Olli Rehn said the eurozone will finally rebound in the final three months of 2013, registering 0.7 per cent expansion for the fourth quarter.

At 11:45 GMT, the German Dax rose by one per cent to an index value of 7661.7 points and the French Cac 40 rallied by 1.6 per cent to 3686 points.

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