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EU sets economic reform strategy

26 March 2010 23:51 (UTC +04:00)

Baku â€“ APA. European Union leaders have called for economic reforms to prevent a repeat of Greece’s debt crisis and boost growth in the region following a summit in Brussels, APA reports quoting Aljazeera.net web page.
The "Europe 2020" economic strategy aims to put all EU nations on the path of sound public finances, job creation and sustained growth.
The move comes after Greece’s national deficit spiralled out of control, flauting EU budget limits on debt and deficits and threatening to devalue the euro.
Jose Luis Rodriguez Zapatero said "a coordinated economic policy was absolutely essential" if the EU as a whole is to become more competitive.
The strategy, agreed on during a two-day summit in the Belgian capital, commits the bloc to boosting employment for citizens aged 20-64, increasing research spending by governments and companies and reducing the number of people living in poverty.
It also aims to generate more renewable power and reduce energy consumption as part of the EU’s ambition to slash greenhouse gas emissions by 2020.

Greek relief
On Thursday the bloc’s leaders agreed to help Greece if its own cost-cutting measures prove inadequate, causing a sigh of relief in the debt-stricken nation.
Greek markets rallied on Friday and the largest union said it would hold off on further strikes amid widespread relief in the debt-plagued country over a cash support program agreed by other euro countries.
Top-selling daily newspaper Ta Nea pictured George Papandreou, the prime minister, smiling on its front page, beside the banner headline "Phew! Double Breather."
â€œWithout doubt, I think the ... announcement for Greece is a very positive development," Platon Monokroussos, head of financial markets research at Greece’s private Eurobank, told the AP news agency.
"The think the package removes the risk of sovereign default and ultimately is going to prove positive for the economy ... I expect sovereign bond yields to tighten in the next few days," he said.
Angela Merkel, the German chancellor said on Friday the move to help Greece was important to "protect euro stability".
"For all of us it is important that our common currency ... remains stable and that’s why yesterday was important for the euro," she said.
Under the accord Athens will receive co-ordinated bilateral loans from its eurozone partners as well as International Monetary Fund (IMF) assistance if it is unable to raise enough money from commercial markets.
No numbers were given of the eurozone deal but a senior European Commission source said the support package would be worth 20-22 billion euros ($27-29bn) if it was required.
Greece needs to borrow around $21.4bn between April 20 and May 23 to refinance maturing debt.
’Last resort’
Tough terms imposed by Merkel mean the mechanism may be activated only under strict conditions and would require the unanimous approval of the eurozone, giving Berlin a veto.
Eurozone countries would provide the majority of any funding on rigorous conditions recommended by the European Commission and the European Central Bank (ECB).
The IMF would contribute one-third of the money and its expertise if needed.
Many details remained unclear, such as the division of responsibilities between the IMF and the eurozone in a rescue.