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EU seeks growth by shifting focus to reforms

EU seeks growth by shifting focus to reforms
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The European Union is shifting the emphasis from austerity to growth by giving France, Spain, the Netherlands, Poland, Portugal and Slovenia more time to get their budget deficits under control.

The message was that the spending cuts must continue, but slower and not so deep.

However at the same time eurozone countries were ordered to speed up reforms – making it easier to hire and fire and to address the problems with pension systems and public services.

Commission President Jose Manuel Barroso said: “We need to reform, and reform now. The cost of inaction will be very high.”

He also called for everyone to work together: “This is the European consensus I am calling everyone to rally around now. We have to overcome the ideas of policies coming just from one or another capital, we need a European consensus.”

Barosso said France urgently need to focus on its failing competitiveness, simplifying its tax system to help companies and make its pensions system sustainable – which is why its been given an extra two years to cut public spending and its deficit.

Italy was judged to have met EU rules on deficit reduction – thanks to the efforts of technocrat prime minister Mario Monti – but Rome’s new government was also given a long list of urgently needed reforms.

Hungary was also released from further monitoring by Brussels under the EU’s so-called “excessive deficit procedure” as were Latvia, Lithuania and Romania.