EUROPEAN ECONOMY 7|2009European Commission
Directorate-General for Economic and Financial AffairsLuxembourg: Office for Official Publications
of the European Communities, 2009
ISBN 978-92-79-11368-0The European economy is in the midst of the deepest
recession since the 1930s, with real GDP projected
to shrink by some 4% in 2009, the sharpest contraction
in the history of the European Union. Although signs of
improvement have appeared recently, recovery remains
uncertain and fragile. The EU’s response to the downturn
has been swift and decisive. Aside from intervention to
stabilise, restore and reform the banking sector, the
European Economic Recovery Plan (EERP) was launched
in December 2008. The objective of the EERP is to restore
confidence and bolster demand through a coordinated injection
of purchasing power into the economy complemented by
strategic investments and measures to shore up business
and labour markets. The overall fiscal stimulus, including
the effects of automatic stabilisers, amounts to 5% of GDP
in the EU.
