Brussels, 16/03/2010 (Agence Europe) - At their Eurogroup meeting on Monday 15 March, eurozone finance ministers made a cautious assessment of the outlook for the eurozone based on the interim economic forecasts published by the European Commission (see EUROPE 10086), expecting growth to remain “fragile”, explained the chair of the Eurogroup, Jean-Claude Juncker, after the meeting. He said that there was continued uncertainty and risks, and the special public economic recovery measures would not be changed.
Juncker said that another issue of concern for the economy was the gap in competitiveness among members of the eurozone, which he described as a “serious problem” of which the Eurogroup has decided to get a firmer grip. Eurozone ministers will be taking a regular look every two months at the individual situation of the various eurozone countries in order to take a long, hard look at measures, including controversial measures where necessary, that the countries must kickstart to remedy any loss of competitiveness.
EU Economic and Monetary Affairs Commissioner Olli Rehn said the idea was to ensure closer and more systematic monitoring of the various countries in the eurozone and this was connected with the upcoming legislation to be published shortly by the Commission on boosting coordination of economic policies. The legislation will be unveiled ahead of the meeting of EU finance ministers in Madrid in April, which will be discussing the issue.
Asked whether the assessment of the competitiveness gaps would also cover Germany, Commissioner Rehn did not respond to the comments made by French Finance Minister Christine Lagarde in an interview in the Financial Times on Monday 15 March that the German model of high pressure on labour costs to improve the country's competitiveness was not necessarily viable in the long run. Rehn said it was urgent for corrective measures to be taken by countries with current account deficits and this could not solely be examined in an “asymmetrical” manner. At the same time, he explained, it would need to be examined whether countries with current account surpluses should consider structural reforms to encourage domestic demand at home and also in the rest of the eurozone. Rehn said that these issues had been the starting point for the ministers' discussion of macroeconomic imbalances and gaps in competitiveness, but Juncker preferred to focus on countries where economic growth is fizzling out. He said the priority was still policies to generate economic recovery in countries that have lost competitiveness since joining the euro. He added that the same question also arose for countries with current account surpluses but with a lesser degree of urgency. (A.B./transl.fl)