This fuels a vicious circle of deficits and recession that leads to repeated revisions of deficit and debt targets, undermining the credibility of the consolidation programme. The deeper-than-expected recession makes a faster pace of structural reforms imperative Over the last few years, the recession has turned out to be deeper than initially forecast.
During their catching-up-process, the new Member States will further gain in importance and may turn into a driving force of the European economy. As a result of the dismantling of trade barriers, trade links with the new EU Member States have gradually intensified.