Euro Zone Crisis
The euro zone crisis was triggered in 2009 when Greece's debts, left by its previous government, reached a record 300 billion euros, leaving the southern European economy with debt levels more than four times higher as a proportion of gross domestic product than the official euro zone cap of 60 per cent of GDP. Since the original problems were uncovered, Greece has been bailed out twice, and lenders have also had to rescue Ireland and Portugal. In the latter half of 2012. Cyprus also required a bailout.
Euro zone 'coming out of crisis' amid accelerating growth, Eurogroup chief says
Eurogroup president Jeroen Dijsselbloem said the euro zone is “coming out of crisis” and the member countries are expected to grow an average 1 per cent this year and 1.7 per cent next year.
The Eurogroup, the main forum for the management of the single-currency area, is an informal body that brings together the finance ministers of countries whose currency is the euro.
“Europe is coming out of crisis and prospects are very good for investors,” Dijsselbloem, the Dutch finance minister, said at the Asian Financial Forum in Hong Kong on Monday.
He said growth would accelerate increasingly in years to come as more reforms are pushed forward.
Dijsselbloem said EU countries would continue to adjust their pension systems by raising the age threshold for pensioners in the coming years, as a move to lower the burden of working people.
“Some would say that the recovery has taken too long and governments [have moved more slowly] than expected. You have to realise, first of all, the character of the crisis we had in Europe, which was in essence a debt crisis,” he said.
“Dealing with debt both on the levels of government and companies as well as households is a process that takes a little more time.
“That explains why some economies take longer than we might have expected to come out of recession. That’s happening at the moment. Many of the indicators are showing more progress now than expected coming out of a debt crisis.”
Klaus Regling, managing director of the European Stability Mechanism, also said at the same forum that the euro zone is "moving away from crisis".
There have been significant fiscal consolidation and structural reforms at the national level, he said.
Meanwhile, more bridging rules for policy co-ordination had been announced, underscoring the extent of economic policy co-ordination in the euro area, Regling said.
He cautioned, however, that the region still faces risks.
"Borrowing continues and some of the firms still need continuous financial support,' Regling said.
"Financial markets in the EU are fragmented and growth prospects are still limited."