国际英语新闻：EU economy mired in debt crisis

So far, economic recovery in the EU has generally not been interrupted by the debt crisis, but risks are rising as the crisis is taking its toll on the real economy.

The combined economy of the 27 EU countries was expected to grow by 1.8 percent this year, ending a sharp contraction of 4.2 percent last year, according to a forecast by the European Commission last month.

The recovery was even faster than previously anticipated, thanks to strong performance in the first half of this year.

"There were two major factors that helped the EU economy rebound in the first half of this year, namely strong external demand for EU exports from countries like China and the positive effect of fiscal stimulus measures taken by EU countries in response to the economic crisis," Xiong Hou, an expert in European economy at the Chinese Academy of Social Sciences, said.

But the EU economic recovery started to lose steam in the second half of this year, mainly due to the debt crisis, less favorable external demand and record-high unemployment.

As the debt crisis could flare up again, financial markets remained under stress. Banks were again tightening credits for fear of possible losses in holding sovereign debts of the crisis-hit eurozone countries, which would threaten economic recovery.

In response to the debt crisis, EU countries acted resolutely to end stimulus measures and turn to fiscal consolidation. By reducing public spending and raising taxes, EU governments hoped to cut their fiscal deficits and regain investors' confidence.

All these austerity measures might undermine economic recovery, which remains fragile, analysts warned.

Amid a softening global environment, the growth of EU exports, a major driver of economic recovery so far, was expected to slow down next year. With the jobless rate remaining at record-high levels, private consumption would continue to be dampened.

The European Commission said the EU's economic growth would slow to 1.7 percent next year, and warned risks to the growth outlook are not negligible, with uncertainty still high.

Debt-laden countries like Greece and Ireland had to go through a longer period of economic pains. Recovery in those countries would be subdued for several years, and they would continue to be cause for anxiety in the markets.