EU official: energy prices to remain high for some time

BRUSSELS, Nov 7 (KUNA) - European Union's top-most economic official Monday warned of an economic contraction in the 19-member euro area and predicted that energy prices will remain high.
"The inflation in the euro area has climbed to 10.7 percent, and if we look at high frequency indicators and the economic sentiment, we see that many things point to a contraction in economic activity this winter, in the coming months," said EU Commissioner for Economy Paolo Gentiloni.
Speaking at a press conference in Brussels this evening after a formal meeting of Eurozone finance ministers, he said "we need to work together to improve our performance, not least because we can expect energy prices to remain high for some time to come." On his part, Paschal Donohoe, President of the Eurogroup, told the joint press conference that everyone has known for some time that the economy within the euro area is slowing.
"The European Commission forecasted growth of 2.7 percent for 2023 before Russia began its awful war on Ukraine. The latest figure for growth for the euro area in October is now 0.5 percent. We will get further details on growth expectations from the Commission when they publish their forecast at the end of the week," he said.
"The wider picture of inflation, economic disruption and geopolitical turmoil will also impact our banks and the financial sector more broadly. So we need to maintain sound policies and continue our careful monitoring," stressed Donohoe.
According to estimates by the European Commission, euro area governments have so far collectively spent about 1,25 percent of euro area GDP on energy support for the year. So about 200 billion euro (USD 200 billion), he noted.
The Eurogroup President , who is from Ireland, said his term expires in the middle of next January and thus the need for the Eurogroup to elect a President for the next term of two and a half years.
"In our meeting today, we agreed that this election will be held at the next Eurogroup meeting on the 5th of December," he added. (end) nk.ibi