ECB: Financial crisis to stimulate long-term fiscal reforms in Europe

European Central Bank (ECB) executive board member Stark (Juergen Stark) Monday (August 16) published an article in a foreign media, said the financial crisis in the euro area the government should not austerity but a fundamental long-term financial strategy, a of change, which helps to promote faster economic growth and in reducing the national deficit while increasing revenue.

Stark said the crisis has exposed the industrial world, the weakness of private and public finance, and in the euro zone that has become a turning point to promote collective reflection and self-induced changes in the euro area countries.

Stark is not agree with the current view that the demand for euro area budget deficit has been cut to produce a "European dilemma" (European dilemma), Europe will sacrifice economic growth to serve the financial reform. He said that the so-called "European dilemma" was confused with the fiscal austerity and fiscal reform, the concept, the key is the correct fiscal policy is not just an isolated action, but the basic strategy for fiscal policy to make fundamental adjustments, the aim is to achieve current and future primary surpluses.

Stark said that although the adjustment of the temporary fiscal policy to curb demand, but the change in fiscal policy strategy can bring more revenue and growth. Some of the quagmire of the euro-zone countries in crisis fiscal adjustment strategy is now to some of the necessary adjustment of fiscal policy are structural in nature adjustment. In addition to the tax system, the euro-zone countries is also changing the structure and level of expenditure to make it more conducive to growth.

He said, so "European dilemma" is only an illusion, fiscal reform will help reduce the deficit and growth. He said, "paralysis of Europe" (Euro-lysis) is only an illusion, during the financial crisis, European countries, "positive action to reform quickly."

Stark said that the EU President Rompuy (Van Rompuy) as the head of the European Economic Governance Task Force (EU Task Force on Economic Governance) required to promote economic reform in Europe, including the "strengthening of financial supervision, the implementation of more stringent multilateral surveillance to prevent excessive deficit and debt situation, and better means of crisis prevention and treatment. "

He said the new regulatory framework will not only macroeconomic monitoring of public budgets, and national economic trends as to whether the euro zone economy fit the entire monitor. This will allow the euro zone countries to other countries within the same region at the national level and can also put pressure on the euro-zone countries for more targeted follow-up to recommendations put forward.

Stark said: "The reform agenda is not just fantasy, we are strong-willed, and has the European Coal and Steel Community (European Coal and Steel Community) to develop into the same sense of purpose when the EU ... this is the reality of today's Europe."