Commissioner Rehn discuss the state of the European economy

STRASBOURG, FRANCE (BNO NEWS) – European Commissioner for Economic and Monetary Affairs Olli Rehn on Monday discussed the state of the European economy and how to regain the economic confidence and growth.

Rehn said that in order to strengthen the economic recovery and lead the way for sustainable growth, the EU needs to restore and reinforce confidence into the European economy by delivering safeguard financial stability in Europe, pursue growth-friendly fiscal consolidation, conclude financial repair and reform, advance structural reforms, and reinforce economic governance.

The Commissioner recalled the achievements reached at the G20 summit in Toronto, Canada, where it was agreed on the importance of global coordination in order to safeguard and support the ongoing recovery of the world economy by an orderly completion of fiscal stimulus this year and subsequent growth-friendly fiscal consolidation according to each country's circumstances.

Regarding the international fear of a downfall due to the financial market turbulence, Rehn said that these fears are exaggerated. According to the Commissioner, the economy's trend is clearly upwards.

As an example, the European export industries have capitalized on the robust rebound in world trade, the level of unemployment is stabilizing in the EU and industrial production in countries like Ireland and Spain, a couple of hard-hit countries, is improving.

Rehn also warned about containing any uncontrolled increase on public debt due to the fact that a steady fiscal course is essential to reinforce costumer's and investor's confidence. In this way, the emerging and gradual recovery could be turned into a period of sustainable growth and job creation.

Another key element of restoring the economic confidence is a stronger and better EU economic policy coordination. This was revealed by the crisis as the major systemic weaknesses in the current Economic and Monetary Union.

Finally, Rehn called for a wider range of incentives and sanctions in order to strengthen the credibility of EU's fiscal framework through a better enforced and more rules-based Stability and Growth Pact.

(Copyright 2010 by BNO News B.V. All rights reserved. Info: sales@bnonews.com.)