Eurozone is out of recession, but commissioner Rehn remains cautious
The 17 countries of the eurozone grew by 0.3% in the second quarter, emerging from an 18 month double-dip recession.
The eurozone growth data were better than expected. While welcoming the news as a good opportunity to improve, European commissioner for economic and monetary affairs Olli Rehn has urged policy makers not to get to hasty conclusions.
“I hope there will be no premature, self-congratulatory statements suggesting ‘the crisis is over’. For we all know that there are still substantial obstacles to overcome,” he said in his blog post.
As Rehn further explained, growth figures remain low and important differences between member states remain hidden from the growth data.
“A number of Member States including Spain and Greece still have unacceptably high unemployment rates, especially for young people, which has created real risks of a lost generation,” he said.
However, Rehn was positive about the good performance of stock markets and said bond yields in peripheral euro area countries are “slowly but consistently coming down.”
Rehn also pointed out that the positive results confirmed the effectiveness of Europe’s response to the crisis.
“The data also supports, in my view, the fundamentals of our crisis response: a policy mix where building a stability culture and pursuing structural reforms supportive of growth and jobs go hand in hand. To work, this policy mix needs the basis of our economy to be stronger: that is why we are cleaning up the mess in the financial industry and putting in place new rules for a sounder financial sector in the future, as well as reinforcing economic governance at both national and European level. And there is no doubt that the decisive policy action of the European Central Bank has had a decisive impact by supporting the short-term stabilisation of financial and bond markets.”
According to Rehn’s report, however, the recovery is expected to be more solid going forward.
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