EU takes step towards more economic coordination
The European Union took the first step towards tighter economic policy coordination on Wednesday as its executive arm set out top economic priorities for EU governments to be included in 2012 budgets.
January 13, 2011 / 09:32 IST
The European Union took the first step towards tighter economic policy coordination on Wednesday as its executive arm set out top economic priorities for EU governments to be included in 2012 budgets.
The European Commission said in its Annual Growth Survey that fiscal consolidation at a fast pace was crucial but it should be combined with structural reforms to boost employment and with measures to boost economic growth rates."The most urgent task is to break the vicious circle ... of unsustainable debt, financial market disruption and low economic growth," the Commission said in a statement."Only fiscal corrections of 1% of GDP per year or more would put debt levels in percent of GDP on a firm downward path over the coming two decades," it said."Although the degree of urgency is not the same in all Member States, consolidation remains a key policy priority for all," it said.Priority-setting is the start of the so-called European Semester process which is expected to take about six months and result in EU countries coordinating budget planning.The process, part of efforts designed to help prevent economic crises in the future, will have several stages.The Commission's Annual Growth Survey will be the starting point for EU leaders in March to identify the main challenges facing the EU and agree on what the response should be.Each EU country will then prepare a plan on how it wants to reform its economy in line with the leaders' guidelines and send their proposals to the Commission in April for assessment.By June-July each country would receive specific guidance on planned policies from fellow EU ministers and the Commission, in time for their incorporation into budget drafts before they are submitted to national parliaments for approval."A new phase of European integration begins with the Annual Growth Survey," Commission President Jose Manuel Barroso said in a statement."We are setting out to break new ground and to decisively improve the way in which we manage and coordinate our interdependent economies in the European Union." Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
