Brussels, 06/11/2012 (Agence Europe) - Europe must keep up the momentum of reforms undertaken in the structural, budget and financial domains in order to boost competitiveness and promote financial stability, said the G20 Finance Summit in a statement after its meeting in Mexico on 4 and 5 November 2012. The G20 pledges to get national finances on a sustainable track although, against the backdrop of lack-lustre global growth, it will also ensure that budget consolidation is of an appropriate level to ensure it backs recovery. Countries like Germany, which have plenty of room to manœuvre budget-wise, say they will take action to stimulate demand.
Commenting on the sovereign debt crisis, the G20 welcomed the introduction of the European Stability Mechanism (ESM), the eurozone's new bailout fund with lending capacity of €500 billion, and the eurozone's desire to set up a single bank supervision system in 2013 under the aegis of the European Central Bank. The G20 is eagerly awaiting finalisation of the technical details to allow banks to be bailed out directly from the ESM once the eurozone bank supervision system has been set up.
Spain. On Wednesday, the European Commission will be publishing its autumn economic forecasts. Spanish newspaper El País says it is forecasting Spanish GDP to shrink by 1.6% in 2012, 1.5% in 2013 and grow slightly (by 0.5%) in 2014. Spain's deficit is expected to reach 7% in 2012 (taking account of the bank bailouts), 6% in 2013 and 5.8% in 2014. These figures are more pessimistic than those provided by the Spanish government, not taking account of recent measures like a 1% rise in VAT. Spain's debt is expected to continue to rise, reaching 90% or more in 2014. Speaking in Mexico, Spanish finance minister Luis de Guindos said that Madrid would not seek an EU bailout this year. "For this year, the Spanish treasury is well-financed... We have almost covered our financial needs for this year," he said. (MB/transl.fl)