FRANKFURT (MNI) – Eurozone countries have made fundamental progress
as they undergo a necessary adjustment process to correct fiscal
imbalances and restore competitiveness, European Central Bank Executive
Board member Peter Praet said Friday.
“A sometimes painful, but necessary, rebalancing process has
started within the euro area. Some fundamental progress has already been
made in tackling intra-euro area imbalances,” Praet said in prepared
remarks released of a speech given in Hamburg.
Praet cited reduced budget deficits across the Eurozone and pointed
to peripheral EMU members engaging in the most aggressive structural
reforms.
“Competitiveness in programme and vulnerable countries is being
restored. In the countries most affected by the crisis, noticeable
progress is being made in the correction of unit labour costs and
current account imbalances,” Praet said.
But this rebalancing could only be secured long-term with a “firm
commitment” from governments to move towards a “genuine” economic and
monetary union, he said.
The ECB through its non-standard measures had meanwhile succeeded
in giving banks the “breathing space” to restructure their balance
sheets “in an orderly fashion,” Praet said. “There has been no
disorderly deleveraging, which was perceived as a major concern at the
end of last year.”
— Frankfurt bureau: +49 69 720 142; email: ccermak@mni-news.com —
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