EC warns eurozone to fall back into recession this year

The European Commission has warned the eurozone will be back in recession this year despite "signs of stabilisation" on the continent.

GDP is forecast to contract by 0.3% in 2012, a cut of 0.8 percentage points according to a report released by the EC today, with much of the decline coming in the first two quarters. The fall comes after growth of 1.5% for the region as a whole in 2011. "Modest growth" will return later this year as investor and consumer confidence improves, but this will not be enough to stave off an overall decline in economic activity. Olli Rehn, the vice president for economic and monetary affairs said: "Although growth has stalled, we are seeing signs of stabilisation in the European economy. ...