EU raises eurozone economy forecast slightly

The European Commission on Tuesday raised its forecast for economic growth across the 19-country eurozone slightly, saying that its economy is benefiting from positive economic tailwinds.

According to the European Commission's Spring 2015 Economic Forecast, real gross domestic product (GDP) in 2015 is now expected to rise 1.8 percent in the EU and 1.5 percent in the euro area, 0.1 and 0.2 percentage points higher, respectively, than projected three months ago.

For 2016, the commission forecasts a growth of 2.1 percent in the EU and 1.9 percent in the euro area.

"The European economy is enjoying its brightest spring in several years, with the upturn supported by both external factors and policy measures that are beginning to bear fruit," Pierre Moscovici, commissioner for Economic and Financial Affairs, Taxation and Customs said.

The commission noted that Europe's economies are benefiting from many supporting factors. For example, oil prices remain relatively low, global growth is steady, the euro has continued to depreciate, and economic policies in the EU are supportive.

On the monetary side, quantitative easing by the European Central Bank is having a significant impact on financial markets, contributing to lower interest rates and expectations of improving credit conditions.

"The recovery of Europe's economies is strengthening. While this is encouraging, we have to make sure economic growth is lasting and sustainable," said Valdis Dombrovskis, the EU's Commissioner for the euro.

He added that this can happen by implementing the three priority approach endorsed at EU level -- structural reforms, stepping up investment and encouraging fiscal responsibility, while addressing country-specific challenges.

The commission also said it expected the Greek economy would grow only 0.5 percent this year and accelerate to 2.9 percent in 2016 unless policies change. Endi