Eurozone finance ministers yesterday rejected calls for increased economic stimulus measures, despite a worsening outlook for the EU economy. They also rejected any easing of the requirements for joining the eurozone.
Speaking after a meeting of the Eurogroup, which brings together the finance ministers of the 16 eurozone countries, Jean-Claude Juncker, the prime minister and finance minister of Luxembourg, said: “We don’t feel we need to pile deficit on top of deficit and add further to our debt.”
Juncker, who chairs the Eurogroup meetings, added: “We would not want to give the impression we are considering putting together other recovery packages.”
His remarks followed comments from Larry Summers, director of the U.S. National Economic Council, in an interview with the Financial Times, that governments should pump more public money into their economies to fight the recession. “Recent American appeals” for a European budgetary effort are “not to our liking,” Juncker said.
Juncker said ministers had rejected any relaxation of the criteria for joining the euro, including the length of time that countries have to spend in the European Exchange Rate Mechanism II. “There is no question of changing the criteria,” Juncker said. “The credibility of monetary union is at stake,” he added.
Both Juncker and Joaquín Almunia, the European commissioner for economic and monetary affairs, said that assessments of Europe’s economic outlook are now worse than they were earlier this year. Juncker said that the recession is “certainly deeper than what we saw at the beginning of the 1990s.” Almunia said that “the recovery will take longer than we were expecting a few months ago,” and that he now expects a “gradual recovery” to start in 2010.