Eurozone growth

The European Union tempered its growth forecast for the eurozone on Thursday, citing China's economic slowdown and weak demand for European exports in emerging markets.

The economy of the 19-member bloc would grow at a rate of 1.8 percent in 2016, a reduction of 0.1 percent, the EU said.

Growth in Germany and other eurozone heavyweights would be the strongest, with Europe's largest economy set to expand by 1.7 percent by the end of this year and 1.9 percent in each of the coming two years.

Greece, on the other hand, will have a harder time rebounding from its near bankruptcy and the difficulties facing its cash-strapped banks. In 2015, the Hellenic economy was expected to shrink by 1.4 percent. Next year will see a slightly smaller contraction of 1.3 percent.

'Moderate' growth

The light at the end of the Greek tunnel won't come until 2017, the EU said, when the southern eurozone member could see its gross domestic product (GDP) grow by 2.7 percent for the first time since before the global financial crisis.

As long as oil prices are low and the European Central Bank is pumping billions of euros into the bloc's economy, countries in Europe should take advantage of the favorable conditions and push through hard reforms, such as debt reduction, said one EU executive, Commission Vice President Valdis Dombrovskis.

"Today's economic forecast shows the euro area economy continuing its moderate recovery," Dombrovskis said. But he added: "The impact of positive factors is fading."

Four eurozone economies, for instance, still have deficits exceeding EU-mandated caps of 3 percent of GDP. Those countries are France, Italy, Spain and Greece.

cjc/tko (Reuters, dpa, AFP)