Europe has received more bad economic news, with the 27-member EuropeanUnion announcing the business downturn would be far worse this yearthan its earlier predictions.
The European Union's economy isexpected to shrink by four percent this year - more than twice what wasestimated in January. And that is only part of the grim news that wasdelivered by the European Commission - the bloc's executive arm.
Unemploymentin the 27-member EU is expected to reach 11.5 percent by 2010 - thehighest level since World War II. And as governments invest heavily ineconomic stimulus plans, their deficits are expected to soar to about7.5 percent of gross domestic product - more than twice the limitallowed under EU rules.
But EU economic commissioner JoaquinAlmunia tried to offer a bright side to the gloomy news he delivered toreporters in Brussels.
"Some positive signals have appeared inthe last weeks, including the evolution of the financial markets,improvement in business expectations and some real indicators, such asexport data in Asia, pointing, all of them, to a stabilization of theeconomy in the second part of this year and a gradual recovering in2010," Almunia said.
But the economic situation is likely to getworse in Europe before it gets better. The European Union predicts theGerman economy, Europe's largest, is likely to contract by 5.4 percentthis year, a larger decline than the EU average. The Latvian economyis expected to be hit even harder, shrinking 13.1 percent in 2009,while Ireland's economy is expected to shrink by nine percent.
TheEuropean Union predicts the bloc may begin to slowly recover next year,but only if the banking system and international trade pick up.