Luxembourg, 19/10/2009 (Agence Europe) - The recent economic upturn fits in with Eurogroup's analysis of exit plans. There are clear signs of recovery but it is not yet time to phase out the economic recovery programmes introduced by the member states, explained the chair of Eurogroup (the group of countries in the eurozone), Jean-Claude Juncker, after a meeting of eurozone finance ministers in Luxembourg the evening of Monday 19 October 2009. He went on to give a shopping list of criteria that have to be in place in order for the exit programmes to be phased out in 2011.
Juncker said that if the European Commission's autumn economic forecasts published on 3 November 2009 confirm that recovery is well and truly in place and the improvement is resilient and sustainable, then he believed the accompanying recovery measures funded by state budgets should be gradually withdrawn. He added that this would mean withdrawal of the measures in 2011, when structural budget consolidation should go further than 0.5% of GDP a year. This statement was shared by the president of the European Central Bank (ECB), Jean-Claude Trichet, who explained: “We are for strict observance of the Stability and Growth Pact.” “It is very important in any case to start in 2011 the exit strategy and we consider that more than 1% of reduction of structural deficit will be necessary in a very large number of cases unfortunately.” If the Commission's figures show that 2011 can be seen as the first year of resilient recovery, then the time will be right for starting to phase out the state-funded recovery measures, agreed EU Economic and Monetary Affairs Commissioner Joaquín Almunia, stressing that each country would need to take a different approach. Although 2011 should be seen as the final timeline for starting to bring public finances back to normal (by more than 0.5% a year), the specifics of certain member states may mean that they will have to act sooner. He added that this might mean certain countries being sent recommendations on consolidating their public finances in 2010.
The Commission will soon be formally noting that nine countries on which it has published reports (see EUROPE 9993) are in an excess budget deficit situation under Article 104, paragraphs 5 and 6 of the treaty and will be issuing them with adjustment strategies under Article 104, paragraph 7, and it will also be examining how countries already subject to this procedure are implementing the recommendations addressed to them by the Council of Ministers six months ago, namely Spain, France, Greece and Ireland. At its meeting on 11 November 2009, the college of EU commissioners will look at whether the countries in question have taken effective measures in line with the requirements of the stability pact. At the end of the year, Eurogroup and the ECOFIN Council will together discuss the same issue. (A.B./transl.fl)