Cyprus Mail

No room for complacency says EU Commissioner

Olli Rehn

Nicosia, Aug 14 (CNA) – European Commission Vice-President Olli Rehn has welcomed tentative evidence that the European economy is gradually gaining momentum but has warned that there is no room for complacency.

“Over the summer, a potential turning point in the EU economy has been in the making, though still fragile”, Rehn writes in his blog, commenting on GDP 2nd quarter of 2013 Eurostat data released on Wednesday.

“Add today’s quarterly GDP figures to other recent positive survey data and you will find reasonable evidence suggesting the European economy is gradually gaining momentum”, he notes.

All in all, Rehn continues, “both soft and hard data over recent weeks support the European Commission’s spring forecast and its projections for a subdued, mild recovery in the second half of 2013”.

For next year, he notes, “our projections show the recovery should be on a more solid footing, as long as we can continue to avoid new political crises and detrimental market turbulence”.

According to the European Commissioner the data also supports that there the response to the crisis should be “a policy mix where building a stability culture and pursuing structural reforms supportive of growth and jobs go hand in hand”.

He highlights the fact that in order to work “this policy mix needs the basis of our economy to be stronger: that is why we are cleaning up the mess in the financial industry and putting in place new rules for a sounder financial sector in the future, as well as reinforcing economic governance at both national and European level”.

He also refers to the European Central Bank’s policy action noting that it “had a decisive impact by supporting the short-term stabilisation of financial and bond markets”.

Furthermore, Rehn adds, “all countries under programmes are putting their houses in order”. They are doing so, he stresses, “with determination, often with painful efforts from their citizens, and with the unwavering solidarity of their European partners|.

“Yes, this slightly more positive data is welcome – but there is no room for any complacency whatsoever”, he points out.

He further expresses the hope that “there will be no premature, self-congratulatory statements suggesting ‘the crisis is over’ ”.

“For we all know that there are still substantial obstacles to overcome: the growth figures remain low and the tentative signs of growth are still fragile; the averages hide important differences between Member States, as a number of Member States including Spain and Greece still have unacceptably high unemployment rates, especially for young people, which has created real risks of a lost generation; the implementation of essential but difficult reforms across the EU, in countries both under programmes and other Member States, is still in its early stages”.

“I call on European policy-makers, as well as social partners and business leaders, academics and commentators, to seize this opportunity”, he says. A sustained recovery, Rehn notes, “is now within reach, but only if we persevere on all fronts of our crisis response: keep up the pace of economic reform, regain control over our mountain of debt, both public and private, and build the pillars of a genuine economic and monetary union with no loopholes where irresponsible bankers or short-sighted policy makers can thrive”.


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