Mr. Benoît Cœuré: »All European countries are in the same boat and headed in the same direction«
On Friday, 31 January 2014 renowned French economist Mr. Benoît Coeuré gave a lecture at the Faculty of Economics entitled The euro area – challenges ahead. Mr. Coeuré, a member of the European Central Bank executive board, accepted the invitation of Mr. Boštjan Jazbec, the Governor of the Bank of Slovenia and associate professor at the Faculty of Economics in Ljubljana.
A slow and painful recovery from the economic crisis has raised many questions about the effectiveness of adaptation processes in vulnerable euro countries as well as their economic and social costs. “Dealing with the crisis would be much less painful if the adjustment processes had been implemented more quickly”, stressed Mr. Coeuré. He admitted that fiscal adjustments had not been favourable for the economic growth, but unfortunately cutbacks on spending were crucial for the long-term growth. The toll of the crisis is high, with the Slovenian GDP falling by 11% in the recent period. Yet, Mr. Coeuré believes that 2013 was the year of the turnaround and predicts better prospects for the economic growth this year. His forecasts are based on unemployment rate estimates, which have stabilized in the euro countries and are, according to Mr. Coeuré, bound to decrease in the coming years.
The French economist pointed out that the continuation of the reform processes was crucial also in the countries that were not affected by the crisis. Simultaneous implementation of reforms in all the euro area countries will generate a greater impact on the economic growth and ensure better social acceptance of reforms. “All European countries are in the same boat and headed in the same direction”, concluded Mr. Coeuré.
Mr. Jazbec agreed that Slovenia had to implement and observe all the measures that would deleverage the real debt and encourage economic growth. “I hope that the results of stress tests and the way in which Slovenia has reacted are a sufficiently good sign for future activities,” said Mr. Jazbec. He also believes that the decline in premiums by more than 100 basis points on the Slovenian debt is a sufficiently clear signal that international markets and investors have confidence in the Slovenian economy. Nevertheless, the governor warned that the temporary success should not give rise to complacency and thus endanger further activities that need to be undertaken urgently. “All measures taken so far represent only the necessary, but not the sufficient condition for the well-desired economic growth”.
Špela Bandelj, EFnews
Proofread by Živa Furlan
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