Olli Rehn - the EU's economic commissioner - in a DW interview demanded greater efforts from member states to combat the bloc's high unemployment rates and credit crunch.
Deutsche Welle: What is the most important thing that EU states urgently need to do to generate more economic growth?
Olli Rehn: the most important thing right now is to combat the unemployment that we have in many parts of the European Union. In the short term, we need to improve the access to credit for mid-sized companies. That is where most of the jobs are generated and that is where we have the biggest bottleneck for financing. This is hindering economic growth, particularly in southern Europe.
Are the structural reforms in EU member states progressing fast enough, or are things moving too slowly?
It is good that a wave of reforms is happening in many countries in Europe, but the other side of the coin is that in some states things could certainly be moving faster. For example: In 19 of the 27 member states we have seen serious reforms of national pension funds since the beginning of the [financial] crisis. We have seen efforts to reform the labor market. That happened in Germany 10 years ago, but other countries have just started in the last couple of years. We know from the German example that in takes some time for reforms to have an effect on the actual economy and generate jobs. Nevertheless, we have to stick with it and implement reforms.
Over the last year, a lot has been said about improving leadership within the eurozone (the 17 countries using the common currency). So far, for the most part, we've seen lots of timetables and drafts - but is this enough?
I hope that the many plans will go from being small streams to becoming big rivers. There is a lively, intense debate going on about political goals and ways to reform the currency union. I would especially like to emphasize the enormous important of the banking union. We made tremendous progress last night (26.06.2013) as far as winding up and reorganizing ailing financial institutions. I expect that the EU Commission in a few weeks' time will present a draft law with a mechanism for liquidating failed banks. We need all this to create a healthy and resilient banking sector in Europe, which truly serves the business community and contributes to creating jobs.
The EU Commission released very specific recommendations to each member country detailing what reforms have to be made. Do you think members will swallow all this, or is there resistance?
The 27 EU finance ministers held very intense discussions just last week on this issue, and did reach an agreement. I am confident that the government leaders and heads-of-state will accept the recommendations. Essentially, we are demanding a sustainable correction of public budgets and greater efforts to generate jobs and growth.
Does this also apply to France? President Francois Hollande does not appear to agree.
We had good talks with President Hollande and Finance Minister Moscovici. I know that the political situation in France is a challenge, to put it mildly. But at the same time, I think the French know that it's in their own interest to reverse the trend of weakening competitiveness. Public finances must be cleaned up, and that's what our recommendations are aiming for. It is my understanding that the French government wants to move in this direction.
Olli Rehn is vice-president of the European Commission. His portfolio is the economy and the common euro currency. The commissioner has always been on the front lines when it comes to saving the euro and combating the debt crisis. Rehn, a Finnish liberal, has been playing a central role in evaluating the economic and finance policies of the 27 EU states. He has been a member of the European Commission since 2004.
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