Finance ministers from the 27 European Union countries have agreed that moves to cut budget deficits following the economic crisis should start in 2011, but they said that economic stimulus is still needed for the moment.
That follows a similar commitment by the 16 euro zone finance ministers. EU Economic Affairs Commissioner, Joaquín Almunia said: “In fact, the majority of countries will have a deficit of about 8%, because of the recession of the past two years. Now, we need to establish the adequate deadlines and paths for the correction of these excessive deficits, it’s an important issue that we have to combine with short-term fiscal stimulus that is still needed.” The finance ministers also adopted a preliminary agreement to sharply boost the amount of capital banks must hold. It is part of wider, global efforts to reduce the likelihood that huge taxpayer backed bailouts of banks will be needed in the next crisis.