"Reduced business activity, possible spillovers from the restructuring of the banking sector to professional business services and the hiring freeze in the public sector are expected to push the unemployment rate higher in 2013 and more so in 2014," the commission said in its report, referring to the consequences of a bailout that included a raid on savers' deposits.
The spring forecasts underlined the stark contrasts between eurozone member states, with France becoming decoupled from Germany as the economic centre of the single currency bloc. The commission sees the German economy recovering gradually on the back of improving domestic demand, helped by a "robust labour market and more dynamic wage growth". GDP in France, however, is forecast to stagnate this year amid modest exports.
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