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Brussels, 19 July 2013
Statement by Vice President Rehn ahead of the G20 Finance Ministers and Central Bank Governors meeting in Moscow
As I will tell the G20 Finance Ministers and Central Bank Governors in Moscow today, the EU economy is slowly emerging from the recession. We enter the second half of 2013 against a backdrop of stabilising economic activity and improving confidence, with short-term indicators now consistently confirming a gradual move into positive territory. This points to a resumption of growth in the second half of the year.
We also expect modest employment growth in 2014. However, unemployment remains at unacceptably high levels. We must do whatever it takes to address this overriding challenge for our societies.
The EU strategy to strengthen recovery is focused on four points.
First, we must remain focused on steadily improving the structural sustainability of public finances, at a pace appropriate for each country. Fiscal consolidation is continuing in 2013, but at a slower pace than in 2012. We forecast a structural improvement of around 0.8 percentage points in 2013, in both the euro area and the EU – around half the level of adjustment in 2012.
Second, we must maintain and where necessary step up the momentum on structural reforms for competitiveness, growth and jobs. EU Member States have agreed on ambitious reform agendas for the coming 12 months, which require determined implementation.
Third, we must work to ease access to finance for SMEs. This is essential for sustained growth. While low lending volumes are partly due to low credit demand, they are also due to low supply of credit as banks deleverage, build up capital and repair balance sheets. To ensure that banks have sound balance sheets, an in-depth review of banks' asset portfolios is foreseen before the Single Supervisory Mechanism takes over. The Commission is also working on an initiative to help restore lending to the real economy, coupling resources from the EU budget with European Investment Bank lending to increase the volume of credit available for SMEs across Europe.
Fourth, we must build on the impressive progress made over the past year on the Banking Union. The Single Supervisory Mechanism should become fully operational by September 2014. We presented last week a proposal for a Single Resolution Mechanism. And the main features for direct recapitalisation by the ESM were agreed in June.
This is Europe’s contribution to the G20 agenda for growth and jobs. It is both balanced and ambitious, and I hope that this will be the case for the contributions of all major economies. The meetings in Moscow today and tomorrow should reaffirm the commitment to sustainable growth, through sound fiscal strategies and a rebalancing of the global economy. Global imbalances have narrowed with the crisis, but we need to continue with decisive policy action to make sure that they do not increase again when growth picks up.