Real “progress” is being made to reshape the euro region, which must now focus on economic growth and job creation after agreeing on new rules to ensure budget discipline, European Union President Herman Van Rompuy said.
“Market players or rating agencies sometimes consider our response as incomplete or insufficient,” Van Rompuy said at a press conference in Rome today after meeting with Italian Prime Minister Mario Monti. “Yet real progress has been made in reshaping the euro area in order to build on its fundamentals, which are on average sound.”
While EU leaders are set to sign an agreement on a fiscal compact “in early March” to ensure budget rigor across the bloc, Europe must make jobs and growth its “foremost concern,” Van Rompuy said, warning that a weakening economy could add to the region’s 23 million unemployed.
Standard & Poor’s downgraded the sovereign credit ratings of nine of the single currency’s 17 members last week, citing “insufficient” measures to tame the sovereign debt crisis. Italy’s score was cut two levels to BBB+ from A with a negative outlook, while France and Austria were both stripped of their AAA ratings.
S&P’s decision “points to inadequate governance within the euro area as a risk factor,” Monti told the briefing. The rating company also cited “the positive side of the ongoing efforts taken by the Italian government,” the premier said.
Van Rompuy praised Monti for achieving “impressive” results after two months in office, saying his government’s targets are in line with those of the European Union. “The Italian agenda is the European agenda,” he said. “There is no distinction between what you are pursuing here and what is being pursued in Brussels.”