Saturday, June 20, 2009
European Union leaders spotted the first signs of a “sustainable economic recovery” from the worst recession since World War II and started planning to roll back budget deficits piled up to combat the financial crisis.
The 27 government heads today said the looming end of the slump means it is time to start hatching an “exit strategy.” They also agreed to overhaul financial regulation after banking supervision failed to contain the crisis sparked in the U.S. housing market.
“It is important that consolidation keeps pace with economic recovery,” the leaders said in a statement after a two-day summit in Brussels. “There is a clear need for a reliable and credible exit strategy.”
The EU leaders’ outlook is more upbeat than that struck last week at a meeting of Group of Eight finance ministers, which ended with a statement noting “signs of stabilization in our economies.” U.S. Treasury Secretary Timothy Geithner said at those talks that “it’s too early to shift toward policy restraint.”
The expression of official optimism pushed the euro higher and prompted declines in European government bonds. The currency was up 0.1 percent at $1.3909 at 4:15 p.m. in Brussels.
Extra spending by European governments will pump 5 percent of gross domestic product into the 27-nation economy in 2009 and 2010, helping restore growth after this year’s estimated 4 percent contraction, according to EU forecasts. “The significant measures taken by governments and central banks are contributing to limiting the negative effects of the downturn and helping to safeguard jobs,” according to the statement.
(Bloomberg)
European Union leaders spotted the first signs of a “sustainable economic recovery” from the worst recession since World War II and started planning to roll back budget deficits piled up to combat the financial crisis.
The 27 government heads today said the looming end of the slump means it is time to start hatching an “exit strategy.” They also agreed to overhaul financial regulation after banking supervision failed to contain the crisis sparked in the U.S. housing market.
“It is important that consolidation keeps pace with economic recovery,” the leaders said in a statement after a two-day summit in Brussels. “There is a clear need for a reliable and credible exit strategy.”
The EU leaders’ outlook is more upbeat than that struck last week at a meeting of Group of Eight finance ministers, which ended with a statement noting “signs of stabilization in our economies.” U.S. Treasury Secretary Timothy Geithner said at those talks that “it’s too early to shift toward policy restraint.”
The expression of official optimism pushed the euro higher and prompted declines in European government bonds. The currency was up 0.1 percent at $1.3909 at 4:15 p.m. in Brussels.
Extra spending by European governments will pump 5 percent of gross domestic product into the 27-nation economy in 2009 and 2010, helping restore growth after this year’s estimated 4 percent contraction, according to EU forecasts. “The significant measures taken by governments and central banks are contributing to limiting the negative effects of the downturn and helping to safeguard jobs,” according to the statement.
(Bloomberg)
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