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Economic Crisis in Europe: Causes, Consequences and Responses

The European economy is in the midst of the deepest recession since the 1930s, with real GDP projected to shrink by some 4% in 2009, the sharpest contraction in the history of the European Union. Although signs of improvement have appeared recently, recovery remains uncertain and fragile. The EU’s response to the downturn has been swift and decisive. Aside from intervention to stabilise, restore and reform the banking sector, the European Economic Recovery Plan (EERP) was launched in December 2008. The objective of the EERP is to restore confidence and bolster demand through a coordinated injection of purchasing power into the economy complemented by strategic investments. | ISSN 0379-0991 Economic Crisis in Europe Causes Consequences and Responses EUROPEAN ECONOMY 7 2009 Economic and Financial Affairs DIRECTORATE-GENERAL EUROPEAN COMMISSION The European Economy series contains important reports and communications from the Commission to the Council and the Parliament on the economic situation and developments such as the Economic forecasts the annual EU economy review and the Public finances in EMU report. Subscription terms are shown on the back cover and details on how to obtain the list of sales agents are shown on the inside back cover. Unless otherwise indicated the texts are published under the responsibility of the Directorate-General for Economic and Financial Affairs of the European Commission BU24 B-1049 Brussels to which enquiries other than those related to sales and subscriptions should be addressed. Legal notice Neither the European Commission nor any person acting on its behalf may be held responsible for the use which may be made of the information contained in this publication or for any errors which despite careful preparation and checking may appear. More information on the European Union is available on the Internet http europa.eu . Cataloguing data can be found at the end of this publication. Luxembourg Office for Official Publications of the European Communities 2009 ISBN 978-92-79-11368-0 doi 10.2765 84540 European Communities 2009 Reproduction is authorised provided the source is acknowledged. Printed in Luxembourg European Commission Directorate-General for Economic and Financial Affairs Economic Crisis in Europe Causes Consequences and Responses EUROPEAN ECONOMY 7 .