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14 Aug 2013
Rehn: EU economy gaining momentum but crisis not over yet
FXstreet.com (Barcelona) - Today's string of better than expected GDP Eurozone data has prompted the European commissioner for economic and monetary affairs Olli Rehn's comments that a sustained recovery in the area is now within reach.
The commissioner stated on his blog that: “Both soft and hard data over recent weeks support the European Commission’s spring forecast and its projections for a subdued, mild recovery in the second half of 2013. For next year, our projections show the recovery should be on a more solid footing, as long as we can continue to avoid new political crises and detrimental market turbulence.”
Rehn emphasized that the improvements show that the European Commission's strategy of combining the pursuit of stable fiscal policies with structural reforms to boost growth and employment is giving fruit. He also praised the austerity efforts of countries under bailout programs.
Nevertheless, the commissioner warned against complacency, pointing out that the GDP numbers are still low and that several EU Member Sates still have to tackle excessively elevated unemployment levels and implement difficult reforms to bring them down. “I hope there will be no premature, self-congratulatory statements suggesting 'the crisis is over' Rehn stressed.
Eurozone growth numbers published today show that the area broke out from an 18 month double-dip recession as the 17 Member States economy expanded on a quarterly basis by 0.3% in the second quarter of 2013.
Peter Vanden Houte from ING still suggests we should't get 'overexcited' with the GDP numbers, reminding that it “is still about 3% lower than it was at the start of 2008. That leaves the economy with a large negative output gap, implying continuing deflationary pressure.”
He also doubts the acceleration of the economic recovery in the area in the light of the fact that “confidence remains fragile and some of the structural problems that have been brushed under the carpet until after the German elections, might come back with a vengeance.”
The commissioner stated on his blog that: “Both soft and hard data over recent weeks support the European Commission’s spring forecast and its projections for a subdued, mild recovery in the second half of 2013. For next year, our projections show the recovery should be on a more solid footing, as long as we can continue to avoid new political crises and detrimental market turbulence.”
Rehn emphasized that the improvements show that the European Commission's strategy of combining the pursuit of stable fiscal policies with structural reforms to boost growth and employment is giving fruit. He also praised the austerity efforts of countries under bailout programs.
Nevertheless, the commissioner warned against complacency, pointing out that the GDP numbers are still low and that several EU Member Sates still have to tackle excessively elevated unemployment levels and implement difficult reforms to bring them down. “I hope there will be no premature, self-congratulatory statements suggesting 'the crisis is over' Rehn stressed.
Eurozone growth numbers published today show that the area broke out from an 18 month double-dip recession as the 17 Member States economy expanded on a quarterly basis by 0.3% in the second quarter of 2013.
Peter Vanden Houte from ING still suggests we should't get 'overexcited' with the GDP numbers, reminding that it “is still about 3% lower than it was at the start of 2008. That leaves the economy with a large negative output gap, implying continuing deflationary pressure.”
He also doubts the acceleration of the economic recovery in the area in the light of the fact that “confidence remains fragile and some of the structural problems that have been brushed under the carpet until after the German elections, might come back with a vengeance.”