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“We are not out of the woods yet”, said Pat McArdle, Chairman of EMAC, but with global activity picking up and most of the fiscal correction done, things should keep improving.”
EMAC members also stress that, in order to stabilise the European Union and help it achieve its economic potential in the long run, it must have a clear reform agenda.
While the crisis has brought some enforced structural adjustment, more is needed. The ECB’s promise “to do whatever it takes” has calmed financial markets but the money transmission mechanism is still broken.
A proper Banking Union is needed to break the pernicious link between banks and sovereigns and ensure that households and companies have dependable access to credit at no less favourable terms than those available to their peers across the eurozone.
External influences will also play a role in Europe’s economic recovery, add EMAC specialists, such as the rising interest rates in the United States. They however believe that here, too, a consistent policy response plus rapid agreement on economic reform in Europe could help limit the impact.