Study shows euro economy to grow

Before the above is considered, a strong economic policy must be implemented to overcome the crisis. The ranking also includes forecasts for 2009 and recommendations for policymakers.

According to the Lisbon Indicator, a reference for the European economy, states that growth and jobs fell 0.3 points from the second quarter of this year. The decline is due to a slower economic growth and labor productivity.
Fortunately, Europe’s workforce continues to improve and growth-oriented investments remain steady.

As inflation is set to decline, the agenda suggests that the European Central Bank should consider further interest rate cuts — lowering rates by 3 percent over the next six months. Other recommendations include:

1. Countries without large fiscal deficits should stimulate their economies by creating tax and social security reforms, by providing investment incentives.
2. Europe needs a revised global regulatory framework for the banking sector and financial markets.
3. The fragmentation of the financial and banking markets should also be addressed.

“If governments act forcefully to combat the global financial crisis, I believe that Europe is well positioned for a recovery in 2009,” said Dr. Michael Heise, chief economist of Allianz SE.