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EU's growth impossible without reforms in each member state: FM

Xinhua, April 25, 2015 Adjust font size:

The EU cannot be expected to achieve growth as a bloc without structural reforms in each member state, Latvian Finance Minister Janis Reirs told journalists after the first day of an informal meeting of EU economics and finance ministers (ECOFIN) here on Friday.

Although the EU economy is showing signs of improvement, a number of problems still remain, such as weak domestic demand, low productivity and persistently high unemployment, the Latvian minister said at the news conference.

Structural reforms are needed in each individual member state in order to facilitate investment, employment and growth in general, and the reforms need the support of both social partners and the bloc's citizens.

"We must work towards the EU's competitiveness, so that it did not lag behind other regions of the world and allowed maintaining the existing life standards in the long term. I am confident that the structural reforms will bring investment back to Europe and I therefore call on my colleagues, as they return home, to revise their national policies to clear barriers to investment," said Reirs.

The Investment Plan for Europe, proposed by European Commission President Jean-Claude Juncker, is among the priorities of Latvia as the current holder of the EU's rotating presidency, and both the Council of the EU and the European Parliament are determined to pass the necessary regulation for launching the plan by the end of June 2015, the Latvian finance minister said.

Valdis Dombrovskis, the European Commission's Vice President for the Euro and Social Dialogue, said that "looking at the current state of Europe's economy one could breathe a little sigh of relief", as the bloc's economy was gaining some strength thanks to low oil prices, accommodative monetary measures and global growth, but to implement the structural reforms and recover from the recent crisis, action was required from policy makers.

Dombrovskis called for a common growth strategy for the EU that would be based on investment, structural reforms, including in the labour market and business environment, as well as fiscally responsible policy.

The European Central Bank's Vice President Vitor Constancio indicated at the press conference that attracting investment was crucial because investment in the Eurozone still remained 18 percent below the level of 2007. Structural reforms are the driving force promoting investment in Europe, Constancio said.

Commenting on the situation with the troubled Greek economy and speculations about Greece's possible exit from the Eurozone, Dombrovskis said that the Greek economy was now in a much better shape than it used to be. Greece is showing economic growth again and meeting its fiscal targets, but significant reforms are needed to ensure Greece's financial stability in the long run.

Constancio agreed, voicing confidence that an agreement between the Greek government and the creditors on the financial assistance program will be reached after all.

The ECOFIN meeting in Riga will continue also on Saturday, April 25. Endit