- Category: Business
29 Nov 2012
“There is no shortcut to happiness or sustainable growth for Europe”.
DESPITE the continuing recession and crisis in some countries, the finances of the European Union are about to start a period of slow growth next year. According to Vice-President of the European Commission Olli Rehn, there have been improvements in the management of the debt crisis but a turn for the better will still take time.
Reorganisation programmes and the budding recovery will stop the increase of the eurozone debt ratio next year and the economy will enter a period of slow growth. The GDP-to-debt ratio of the Euro countries will briefly increase to 94 per cent and then start to decrease.
“Several reforms have been initiated in all financial sectors. There is no shortcut to happiness or sustainable growth available for Europe, however,” Rehn said on Thursday in Helsinki.
The economy of the EU and the eurozone will be somewhat reduced this year, and only very moderate growth will be achieved next year. The growth rate will increase to 1.4 per cent in the eurozone and to 1.6 per cent in the whole of the EU.
“The European GDP will probably not be restored to the level prior to the debt crisis until 2013 or 2014. The crisis cost us four or five years’ worth of growth,” Rehn noted.
Progress fastest in Ireland
According to Rehn, corrections of the imbalance in the European economy are becoming faster but the process will take some time. Rehn stated that once growth has been achieved, it will be more sustainable than before.
“States with deficits will have to undergo a similar adjustment as in Finland in the early 1990s.”
HEIKKI KARKKOLAINEN – STT
TARU LAIHO – HT
LEHTIKUVA / AFP PHOTO / GEORGES GOBET / THIERRY CHARLIER
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