Stimuli withdraw euro countries in 2011 if recovery is confirmed

The euro countries agree to maintain the extraordinary measures of economic momentum until 2011, when, if confirmed recovery, began to withdraw from a coordinated manner.
This decision was adopted today by the finance ministers of the area (Eurogroup) and supported by the European Commission and European Central Bank (ECB) during a meeting in Gothenburg (Sweden).
Most European economies, including Spain, are experiencing dramatic increases in government deficits and debt as a result of the substantial aid the financial sector and increased spending to boost activity and to address the increase of unemployment.

Despite the obvious deterioration of public finances, which will often overshoot the deficit and debt limits set by the Stability Pact, the authorities are aware that an untimely withdrawal of incentives may jeopardize the recovery .Therefore, given the fragility that still shows the European economy, the Eurogroup arrived to the conclusion that "it is time to remove the stimuli," explained the end of the meeting the chairman of this informal forum, Prime Minister Luxembourg, Jean-Claude Juncker.

"The economic situation is evolving positively though, remains fragile," said Juncker.
According to the president of Luxembourg, before starting to curb the deficit must wait to confirm that the European economy will stabilize in 2011.
Since the European Commission, the holder of Economic and Monetary Affairs Joaquin Almunia said that "we must discuss now (how to end the stimuli in a coordinated way), but the time to apply when the recovery will be more clear."

This will happen, according to the commissioner, when growth see again driven by domestic and external demand, without the support of exceptional measures such as those now in force in most countries.Somewhat stricter, the ECB president Jean-Claude Trichet reiterated the importance of rigorously applying the principles of the Stability Pact, saying that the path of fiscal consolidation should resume "at the latest by 2011".
Regarding monetary policy, Trichet outlined that the ECB's priority remains to ensure price stability, which for now is not at risk.
Also the second vice-president of the Spanish Government, Elena Salgado, said that "2011 may be a good year" for the abolition of special initiatives for revival, always confirming the start of recovery, which drove in the second half of next year .

Salgado made clear that the tax increase just approved by the Government does not contradict this strategy and recalled that more European countries have decided to raise taxes.
Moreover, both Juncker and Almunia had an impact on the measures to clean up the public purse, when finally adopted, they must be accompanied by a decided impetus to structural reforms to raise the capacity for growth-heavily depleted after the recession - and increase the resilience of the economy to future crises.
They said, in this regard that the growth potential of the euro area has fallen to the crisis environment of 1 percent and warned that if no action is taken, shall not exceed 1.5 percent the next few years, a rate insufficient to meet the challenges associated with aging and reduce unemployment.