European finance ministers have started planning for the region’s economic recovery, which they hope will be next year.
Meeting in Brussels they agreed with the European Commission’s latest forecast that the EU’s economy is at its low point and will contract by four percent this year, only returning to growth in the third quarter of 2010. At which time, the ministers said, there must be a return to fiscal discipline for government budgets. As the Finnish Finance Minister Jyrki Katainen explained: “All stimulus packages need to be temporary. We can’t go on like this after the crisis.” EU leaders will discuss in June whether more spending is needed to boost the economy. During the meeting the French Economy Minister Christine Lagarde said Paris will push for the toughest possible line on regulating hedge funds. The French want to beef up proposed EU regulations, in contrast with Britain, which is Europe’s hedge fund centre, which is pressing for the rules not to be overly strict.