Follow Us

Follow us on Twitter  Follow us on LinkedIn
 
Home>Policy impacting Finance
Print Page Save to My Library <Next Article  Previous Article>
08 October 2009

Commissioner Almunia: crisis highlights urgent need for deeper and broader macro-economic coordination and surveillance in euro area


The euro has protected the euro area from the exchange and interest rate turbulences of past crises and acted as an anchor of sound macro-economic policies for Member States wishing to adopt the euro, or whose currencies are linked to it.

The euro has protected the euro area from the exchange rate and interest rate turbulences that proved so damaging during past crises. It has also played a valuable role as an anchor of sound macro-economic policies for Member States actively pursuing the adoption of the euro, or whose currencies are linked to the euro. The ECB's capability to act swiftly in collaboration with major central banks has contributed to the stability of the international monetary system as a whole.
But the crisis also exposed the vulnerability of some Member States that have accumulated macro-economic imbalances. The same benign macro-economic conditions that facilitated the expansion of credit worldwide, allowed some euro-area Member States to finance fast, but increasingly unbalanced economic growth, as the inflowing capital was not always channelled to its most productive uses. Conversely, countries in current account surplus were faced with an immediate fall in growth as soon as global demand faltered, given that the engine of domestic demand never really kicked in. Unfinished business in fiscal consolidation, financial supervision and the way Member States coordinate their economic policies in EMU further amplified these vulnerabilities and weighed on the euro area's capacity to respond to the crisis.
The Commission calls on Member States to show the political will and leadership to turn common understanding into concerted policy action. The Lisbon Treaty will, hopefully, provide further impetus for improving euro area economic governance, by formally recognising the Eurogroup and its President and by strengthening the surveillance role of the Commission.
The economic issues raised in the Annual Statement are explored in more detail in an accompanying Annual Report which, among other things, analyses in detail the policy response to the crisis and the emergence of the G20 as the critical forum in global economic governance.
 
 
 
 
 


© European Commission

< Next Previous >
Key
 Hover over the blue highlighted text to view the acronym meaning
Hover over these icons for more information


Add new comment





 


www.grahambishop.com
// Business Applications by Denaploy 		Web Master Information
Terms & Conditions
Privacy Policy