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EU finance ministers to agree on end of anti-crisis moves
“If left in place too long these measures could hinder adjustment processes within and across sectors by distorting price and cost signals and by introducing wrong incentives,” said the draft copy of the statement, obtained by Reuters, which is to be issued after next week’s meeting.
The 27 EU finance ministers meet on March 16 to discuss Greece’s financial problems and exit strategies from fiscal stimulus measures worth hundreds of billions of euros that were agreed in late 2008 to battle the crisis.
Economic analysts and politicians say EU governments need to strike a fine balance -- keeping the aid measures in place long enough to avoid killing nascent economic revival but ending them sufficiently early to keep budget deficits under control.
The ministers’ draft statement, which was discussed on Tuesday by EU countries’ ambassadors, said support measures for various industrial sectors such as the car industry should be the first to be extinguished as economic recovery gains pace.
From mid-2010, governments should start scrapping measures to bolster labor markets that are intended to help companies avoid dismissing workers. “These should be gradually withdrawn when the recovery is secured,” the draft said.
“On the basis of the most recent Commission forecasts on growth this could begin with a benchmark of mid-2010 for the EU as a whole, taking into account the historic lag before employment reacts positively to an upturn in economic activity.”
Merkel: rescue fund not to weaken EU budget rules
German Chancellor Angela Merkel said on Tuesday a possible new fund to support euro zone countries that run into financial problems would not weaken European Union rules on budget discipline.
Speaking after a meeting with Luxembourg Prime Minister Jean-Claude Juncker, she said any European monetary fund that emerges from discussions should be seen as a last resort and Juncker said it would not be a solution for Greece’s problems.
Merkel, however, noted positive developments in Greece, saying its recent bond issue was successful, even if the country had a long way to go to overcome its budget deficit and debt problems. The country did not need support, she said. “In my assessment, Greece does not need any financial support,” Merkel told journalists.
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