European Union Economic and Monetary Affairs Commissioner Olli Rehn comments on the economic challenges for Italy and Spain.
Rehn spoke to the European Parliament today in Strasbourg, France. He is a member of the European Commission, the 27-nation EU’s executive arm.
“Spain faces formidable challenges, especially concerning youth unemployment, following the bursting of the credit boom and the real-estate bubble.”
“This adjustment started in the wake of the crisis with a rapid downsizing of the construction sector, a decrease in the external deficit and some improvement in cost competitiveness. Unfortunately, last year in Spain, there was a major fiscal slippage.”
“This slippage came mainly from the regional governments and therefore it is essential that Spain will, as part of its reform efforts, concretely ensure better sustainability of public finances of the autonomous regions.”
“The fiscal-policy stance of Spain, as recommended by the commission and the euro group, is striking the right balance between the necessary consolidation of public finances and concerns about growth in the country.”
“As regards fiscal consolidation, the effort enacted -- in fact already since 2010 -- is significant and has helped to restore confidence in financial markets.”
“At the same time, the sustainability of Italy’s public finances and, of course, the development of its employment depends on its growth prospects, especially in the context of recession as today.”
“The policy response to tackle the longstanding structural weaknesses and boost the growth potential in Italy has so far been determined and, in fact, very comprehensive and wide ranging. The rigorous implementation of the measures that have been adopted so far, especially to open up competition in product and services markets, to improve the business environment and to make better use of structural funds for investment, will be crucial to deliver their full benefits.”
“The crucial next step is the adoption by parliament of the long-awaited reform of the labor market.”
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