Brussels, 19/06/2009 (Agence Europe) - “We were in agreement that the measures taken to date … are beginning to bear fruit, but that does not mean that all the ills have been cured and we have to keep working,” said Czech Prime Minister and President in office of the European Council Jan Fischer on the evening of Thursday 18 June. At the same time, “we have to put together a proper exit strategy for after the crisis,” he told press.
Like the rest of the world, the EU must be ready to continue to “develop and implement the measures required to respond to the crisis”, building on the “important achievements of the past months”, heads of state and government say. In conclusions adopted on Friday 19 June, they say that efforts so far “are contributing to limiting the negative effects of the downturn and helping to safeguard jobs”, paving the way for “sustainable economic recovery”. The same is true for bank recapitalisation and cleaning up of balance sheets, although governments must be ready to do more if necessary, European leaders add, in line with what finance ministers said last week. In addition to these recommendations, the Ecofin Council also listed some deficiencies in the implementation of state recovery measures and measures to support the banking sector (see EUROPE 9917). Ministers acknowledged that it was difficult to assess, at this stage, whether some measures, in particular those designed to improve access to funding, would have their desired effect.
The heads of state and government say they are satisfied with the fiscal effort under the European recovery plan, equivalent to roughly 5% of GDP in 2009 and 2010 (counting discretionary measures by member states, measures taken at EU level and economic stabilisers). Stating that future developments “remain uncertain”, they want to keep all their options open, without laying too great an emphasis on return to public finance consolidation at this point. The draft conclusions said that current economic forecasts did not appear to justify further budget recovery measures; the final text, however, states (at the request of the United Kingdom) that the Council will “do what is necessary to restore jobs and growth”. In similar fashion, the initial version said that emphasis should now be put on budget consolidation as the economy recovers, the final conclusions, however, are more cautious, referring simply to the importance of consolidation keeping pace with economic recovery. There will be time, when recovery becomes more certain, to consider the “reliable and credible exit strategy”, spoken about by all, but still somewhat vague for the moment. It will seek to improve the medium-term fiscal framework (with the setting of medium-term objectives - MTOs) and coordinate medium-term economic policies. (A.B./transl.rt)