Gloomy predictions for the EU

The Vice General Director of the International Monetary Fund, David Lipton, declared in London that the gap between the European Union economies and the other developed countries is getting bigger each day.

“While the economy of the United States of America is getting better, the European Union keeps being in a recession, especially the countries of periphery”, Lipton declared.

According to the International Monetary Fund, the United States economy is expected to have a 3% growth next year, while the Eurozone will have a 1% growth. Even this scenario, according to Lipton, has its own dangers.

“Investments in the European Union are plunging and unemployment is still growing. The financial markets are nervous and keep blocking the transmission of monetary policy. Due to this situation, the stagnation scenario is the most concerning”, declared the second person in charge at the International Monetary Fund.

According to the International Monetary Fund, Eurozone is also threatened by a critical loaning of the private sector, which could refrain the demand and keep the banking balances under pressure for a long time. In Spain and Portugal, the business loan is 1.8 times higher than the GDP. With a low economic growth, the high business debts increase the risk of massive enterprise bankruptcies, and this will shock the banking system in Europe once again. The gloomy predictions for the Eurozone are a strong negative signal especially for Balkan, including Albania. Due to the deep crisis in the Eurozone, Balkan has become one of the places with the lowest economic growth among the under-development countries, and the International Monetary Fund says that this could continue for a long time.

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