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In Europe, the two most pressing structural policy priorities that must be addressed are the challenge of unemployment and the restoration the health of euro area banks, said OECD Secretary-General in Brussels.
A moderate recovery is underway in the major advanced economies, according to the OECD’s latest Interim Economic Assessment. Growth is proceeding at encouraging rates in North America, Japan and the UK. The euro area as a whole is out of recession, although output remains weak in a number of countries.
The euro area crisis finds its roots in the credit booms seen in many countries following the introduction of the euro in 1999. Easy credit led to strong growth in a range of sectors, notably housing, as well as higher levels of public spending. Inflation in these over-heating economies was higher than the euro area as a whole. Rising prices led to rising costs and a loss of international competitiveness.
by Charles Jenkins, Writer, Commentator and former Director of Western Europe Country Analysis, Economist Intelligence Unit, London. The EU’s crisis has as much to do with leadership and solidarity as resolving fiscal and debt problems. It is time to dispense with caricatures and write the next chapter in the EU’s ongoing history. And for that, clear and transparent data will be needed.
Secretary-General Angel Gurría outlines the crucial actions that we must take to resolve the euro crisis, strengthen the global financial system and anchor growth in the long-term through structural reform at the 30th anniversary of the International Institute of Finance in Tokyo.
Europe is putting in place a new system of fiscal rules following the euro area sovereign debt crisis and decades of rising government to debt-to-GDP ratios. These include the so-called "six pack" to upgrade the Stability and Growth Pact to a new Treaty incorporating the "fiscal compact".
Poor growth performance over the past decades in Europe has increased concerns for rising income dispersion and social exclusion.
The euro area must restore sustainable and balanced growth. Decisive action is needed to stabilise vulnerable euro area debt markets in the short run. But, a sustainable recovery can only be achieved with a sound financial sector and structural reforms to boost growth and ease the debt burden.
Euro area finance ministers meeting this week need to boost the firepower of the European stability funds to at least one trillion euros in order to restore market confidence, OECD Secretary-General Angel Gurría said today.
Strengthening the Single Market and its implementation are needed to boost growth. To boost growth and create a sustainable recovery, a strengthening of the Single Market and better implementation of the existing framework are needed to achieve a more integrated and competitive EU economy.