Germany, U.K., Spain Headed For Recession

September 10, 2008 9:57 a.m. EST

Brussels, Belgium (AHN) - Three major European Union economies are in danger of slipping into recession by the second half of 2008, according to the European Commission.

The half-year economic assessment of the euro zone identified Germany, the United Kingdom and Spain as the nations in danger of moving into recession. It echoed a report from the Organization for Economic Cooperation and Development.

Joaquin Almunia, Economic and Monetary Affairs Commissioner, pointed to soaring energy and good prices and the global financial slowdown for the economic downturn. With this trend, the EU reduced the bloc's 2008 growth estimates for the second time in seven months to 1.4 percent from 2 percent and the euro zone's gross domestic product to 1.3 percent from 1.7 percent.

Aside from Germany and Spain which were predicted to fall into technical recession, the report said France and Italy will stagnate.

The commission explained, "The main downside risks identified in the spring forecast have materialized, with the financial turmoil deepening, commodity prices soaring and the shocks to several housing markets spreading more widely."