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Berlin: Europe must 'stay the course' with austerity

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Berlin: Europe must 'stay the course' with austerity
Photo: DPA
19:10 CEST+02:00
Germany argued Tuesday that the eurozone must stay the course with "already successful" reforms and fiscal discipline, a day after European Commission chief Jose Manuel Barroso suggested the tide may be turning against tough austerity.

"Now we must resolutely stay the course, which has always equally stressed consolidation and the strengthening of forces of growth through reforms as the basis for healthy growth," the German Finance Ministry said in a statement.

It said that "in the third year since the outbreak of the sovereign debt crisis in the eurozone, we can see that we have already achieved a lot, but that there is also still some way to go."

Europe is adopting reforms to become more competitive and slashing deficits, which is helping rebuild the trust of international investors, the ministry said. It also pointed to rising exports from peripheral eurozone member countries.

The ministry conceded that labour market reforms "do not work overnight" and said the European Council was right to launch a multi-billion-euro programme to fight youth unemployment.

But it argued that now every country, within its specific conditions, should be "determined to resolutely continue the already successful course."

Barroso had on Monday suggested that the tide may be turning against austerity just as major eurozone economies France and Spain seek more time to bring down their deficits.

He said that while the past policy "is fundamentally right, I think it has reached its limits in many aspects, because a policy to be successful not only has to be properly designed. It has to have the minimum of political and social support."

AFP/mry

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