European commissioner for economy Paolo Gentiloni has warned that the European economy is slowing down.

The commissioner said at a news conference of the Eurogroup that a contraction is predicted at least for the winter months due to the energy crisis and high inflation.

“If we look at high-frequency indicators and the economic sentiment, we see that many things point to a contraction in economic activity this winter,” Mr Gentiloni said.

Paschal Donohoe, president of the Eurogroup, said everyone knows that the economy within the euro area is slowing down.

“In October, economic growth for the area stood at 0.5 per cent,” stated Mr Donohoe.

The finance ministers representing the 19-country euro area met in Brussels on Monday to discuss the eurozone’s economic development and budgetary measures to mitigate the impact of high energy prices.

According to estimates by the commission, euro-area governments have collectively spent about €200 billion, or 1.25 per cent of the European Union’s (EU) gross domestic product (GDP) on energy support for the year.

Mr Gentiloni said about 70 per cent of the supporting measures adopted by the member states so far were untargeted, meaning “they benefit all or a very large share of the population.”

“We are aware, of course, that targeting is not always easy, politically and technically, especially if you have to react very quickly,” Mr Donohoe explained. “This is also why we have the expectation that this targeting of measures can improve in the coming months.”

Mr Donohoe said the ministers noticed the challenges of significant support and effectively managing the trade-off between reducing inflation while supporting vulnerable households and the euro area’s international competitiveness. 

(Xinhua/NAN)