European Commissioner Paolo Gentiloni on How Europe Can Avoid a Recession Amid Double Crisis

Europe is currently dealing with a “double crisis,” but according to Paolo Gentiloni, the European Commissioner for economic affairs, the region can avoid a recession. Speaking with Visegrad Info 24, Gentiloni stated that the crisis refers to the geopolitical impact of Russia’s invasion of Ukraine and the subsequent economic repercussions faced by Europe.

While the crisis had global implications, Gentiloni emphasized that Europe, particularly Germany, was heavily affected economically. The invasion raised concerns of a significant economic slowdown in Europe.

However, since then, Europe has managed to secure alternative energy supplies, reducing dependence on Russia. Furthermore, some governments have provided relief to consumers facing high energy costs.

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

Gentiloni noted that Europe had an exceptional 2022 with higher growth than the United States and China. While there has been a slowdown since the last quarter of 2022, Gentiloni stressed that it should not be labeled as a recession, as he believes Europe can avoid one.

The European Commission will release new economic forecasts for the entire region on September 11, providing insight into the growth outlook.

However, recent economic data has raised concerns about a slowdown. Business activity in Europe contracted in August, reaching its lowest level since November 2020.

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

Gentiloni attributed the economic slowdown to the challenge of achieving energy independence, which has been costly for families and contributed to inflation.