By Jan Strupczewski and Anna Willard
WASHINGTON, April 23 The European economy is
showing some positive signs that it is closer to a recovery
than before, Economic and Monetary Affairs Commissioner Joaquin
Almunia said on Thursday.
"Looking at some indicators in Europe, some of them are
sending us some positive signals, (but) it is not yet evident
that we will start a recovery tomorrow. We still have a lot of
difficult tasks ahead of us, but some positive indicators are
indeed welcome," Almunia told a seminar.
The euro zone's services and manufacturing sectors posted
their best performance in six months in April, key surveys
showed on Thursday, suggesting the severity of the recession
may have eased.
"If we are not yet in a recovery, at least we are closer to
the bottom, and closer to the beginning of the recovery than we
were," Almunia said.
He was speaking a day before Group of Seven finance
ministers and central bankers from the United States, Canada,
Japan, Britain, France, Germany and Italy meet in Washington to
discuss the global economy.
The G7 meeting will be followed by a meeting of finance
ministers from the G20, which includes major emerging market
He said Europe had been slow to react to the financial
crisis, but added the size of stimulus packages put in place in
Europe should not be underestimated and was not much smaller
than in the United States.
European leaders should assess at their next meeting in
June whether their stimulus measures are enough to cushion the
economy from the financial crisis, he said.
"European governments should discuss now in June at the
next European Council if the stimulus is adequate," Almunia
He said the fiscal and monetary measures would work faster
in the United States than in Europe because the economy was
Almunia said that in the short term, Europe needed to focus
on cleaning up balance sheets of banks of and move more quickly
to deal with impaired assets and bank recapitalization in order
to restore credit flow to the economy.
Responding to a question on whether a euro zone country in
trouble should seek financial help from the International
Monetary Fund, Almunia said: "From a political point of view,
it is not acceptable that a (euro zone) country would go to the
He added that were such a situation to arise, the euro zone
would find a solution.
He said European countries would one jointly issue debt,
although there was opposition to the idea now, he said.
"I think we will see it in the future," Almunia said.
He also said it was essential for policymakers to be on
guard against inflation in the longer term and withdraw fiscal
and monetary stimulus as soon as the economy starts
"If we are not able to put forward a sensible strategy to
consolidate public debt and to regain our finances on a
sustainable path, inflation will emerge," he said.