Rigour and austerity cannot be abandoned. On the contrary, they should be part of the agenda of the governments of the European Union and the euro area. This is the key message coming from Olli Rehn and his speech at the Brussels Economic Forum organised by the European Commission. The Commissioner for Economic and Monetary Affairs is clear-cut. “The consolidation of the expense side is still crucial,” he said. “There is no contradiction between consolidation and growth: the realisation of innovative and efficient systems will support innovation and solidity of public finances.”
Europe, said Rehn, “is not out of the great recession, but the recovery is still weak.” This means just one thing: we need to keep on with the strategy we’ve been implementing so far. “There is no possibility of denying that the structural adjustments Europe is undertaking need difficult choices and a strong political will,” because in the end “Member States bear the responsibility of pursuing financial policies and making structural reforms.” Governments, then, should keep on with their vigilance. “For sure there’s a ‘reform fatigue’ in the European population, but it can be overcome only with everyone taking on their responsibilities.”
Rehn’s prescription is the same all over again: consolidation and reforms. With the addition of some indications on the immediate future. “We now need to bring our attention from macroeconomic to microeconomic aspects,” that is, focusing on “the achievement of a single market and the improvement of rules.” The Finnish said “this is what the next Commission should work on.” Member States will receive their austerity inheritance instead.
