Crisis may intensify in Eurozone member states’ economy

Sharp cuts in state spending in some Eurozone member states may negatively affect the region's economic growth prospects next year.

New fiscal rules adopted by finance ministers of EU member states may negatively affect the Eurozone member states’ economy. The state spending restrictions for each EU member state are planned to be gradually tightened. The authorities of countries with big public debt must develop the plans to reduce the budget deficit and set an annual spending limit agreed with Brussels, Financial Times newspaper wrote citing the market participants, Gazeta.ru reports.

Analysts from Consensus Economics think that the Eurozone member states’ gross domestic product will increase by only 0.5 per cent in 2024.

First of all, the budget crisis may affect Italy and Germany, the newspaper wrote. Generali Investments analyst Martin Wolburg predicted that the German economy may grow by only 0.1 per cent next year.