“The euro zone has entered a new phase Our focus so far has been to ensure financial stability. Now the priority is to drive growth.” With this statement the president opened yesterday Eurogroup , Jeroen Dijsselbloem, the first meeting of the finance ministers after the summer recess. one in which rentrée feels a strange sense of urgency.
The “new phase” and the statement of intent Dijsselbloem are explained by the dry break suffered by the European economy in the second quarter. The data (quarter growth equal to zero) met in August and not encouraging. Alarm lights begin to ignite in every European capital at the risk of another recession looms over the continent. It would be the third since 2009.
“We are worried,” admitted the Minister of Economy Luis de Guindos in a recess of the informal meeting with his European colleagues in Milan under Italian presidency. The Government does not believe that this stalemate will jeopardize the recovery of Spanish economy (at least in the third quarter) but admits that “there risk ” that the Eurozone situation worse and degenerate into a third fall, the dreaded triple dip.
Mario Draghi’s speech in Jackson Hole this summer, calling on governments “a program of public investment on a large scale” and more economic reforms to complement a more active monetary policy, was the touchstone. “There is a situation of underinvestment in Europe,” agreed De Guindos favors a stimulus plan to boost the European level to improve the internal market and ensuring future growth is. The word “investment” was on everyone’s lips yesterday in Milan, and not just southern governments.
“The economic situation calls for more investment in Europe, including Germany,” said Finance Minister German, Wolfgang Schäuble. Until a few weeks ago, remember European diplomatic sources, “the term investment was simply taboo in Berlin.” “It begins to have a change of mentality in Germany. Not be as radical as France would but the twist is occurring,” they say.
The budgetary position of France will test the willingness to change. Paris announced this week that he feared already that this year may not meet its fiscal targets; balanced budgets will not recover in 2015, as promised to Brussels where he obtained an extension of two years in exchange for reform, but in 2017
The drama is repeated. “The goals are not met, the reforms are not made, everything is half or watered. Frustration increases because you have to keep asking for reforms,” EU sources summarized. So, despite the disappointment of the broken promises of Paris, the debate on how to grant more fiscal space has begun. Italy and Spain do not hide their support for galas aspirations. “Not asking absolutely no exceptional treatment, but to apply the rules we have in place,” Guindos said on the demands of Michel Sapin, the new French Minister of Economy, their European colleagues. Standards. Spanish officials recall, allow for flexibility in calculating the fiscal effort made by each country.
The easing “should be applied if you have a business case, but not because of political pressure,” the very orthodox European Commissioner Economic Affairs, Jyrki Katainen. According to the stability pact, “two conditions must be given” for granting an extension, he recalled, there has been a deterioration in the economic situation and the government followed the European recommendations. France will have difficulty proving the second point, say diplomatic sources; This year, the deficit rather than decrease, has increased.
Although the words “flexibility” and “investments” are consolidated in the European discourse (Jean-Claude Juncker promises to mobilize 300,000 million to stimulate the economy) the term “reform” does not disappear. “Regardless of the monetary and fiscal stimulus that is decided, these measures alone will not create much growth if not accompanied by serious structural reforms,” Draghi warned.
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