In 1997, real GDP registered growth of 2.6 percent in 1997, and 3.0 percent is forecast for 1998. Over the four years from 1994-97, European growth led to an average net creation of 1.5 million jobs per year. However, labor force expansion during the period averaged 1.4 million annually. Consequently, the unemployment rate is not forecast to fall much from its present level, although recent data may indicate some acceleration in net job creation. Unemployment levels will continue to vary considerably between Member countries.
Inflation is forecast to continue to decelerate.
Eight Member States achieved lower inflation rates in 1997 than in 1996, and 13 brought or kept inflation below a 2.0 percent average annual rate. This is a centerpiece of the Maastricht Treaty, which was signed in February 1992 and entered into force in November 1993. The UK, Sweden and Denmark opted not to participate immediately, while Greece failed to meet the convergence criteria. Implementation of the third stage of EMU full monetary union with a single currency managed by the ECB begins on January 1, 1999. Euro participants will have 30 months from that date to replace local currencies with the euro, though many Member States to not expect the change to take that long.