Europe can emerge from its prolonged period of economic uncertainty by pushing ahead with “painful” but necessary reforms, according to the German chancellor.
Angela Merkel, speaking at a conference of the Federation of German Industries, said that the entire European continent needed to take a collective “deep breath”, reaffirming her belief that austerity and sensible budget policies would help alleviate the tensions felt by many countries.
In doing so, she explained further, the eurozone will emerge in a much stronger position to that in the run-up to the global financial crisis, which exploded in dramatic fashion in the autumn of 2008.
Merkel acknowledged that confidence was still shaky, especially in the financial markets in eurozone countries, with investors and politicians alike unsure whether debts can be paid back over the long term.
Other options available for boosting economic recovery include stronger European banking supervision, arguably counterproductive in the eyes of those who favour greater deregulation as a way of spurring growth, and encouraging countries to support one another in terms of trade agreements.
There has been talk among some economists that Germany should reduce its own edge over the rest of the continent by making exports less competitive, which in turn would give other countries some sway, but Merkel has laughed this off.
“We are feeling that Germany is not an island,” she was quoted by Reuters as saying. “We are an export nation. 40 per cent of our exports go to the eurozone, 60 per cent to the European Union. We can’t disconnect from European and global economic developments”.
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