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Wednesday, February 26, 2014

The European Union Recovery- A Reality

                                                              Statement by Mr. Koen Geens
                                                              Minister of Finance, Belgium
                                                                             on behalf of
                             Armenia, Belgium, Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Georgia,
                             Israel, Luxembourg, Former Yugoslav Republic of Macedonia, Moldova,
                                               Montenegro, The Netherlands, Romania and Ukraine
                            At the 28th International Monetary and Financial Committee
                                              Washington DC, October 11-12, 2013
Significant progress has been made in implementing necessary reforms leading to further economic recovery. However, growth remains weak in most advanced economies. The global economy faces major challenges and spillover effects for which the IMFC should agree on a framework for mutually consistent policy responses. Cooperation among all countries, the IMF and other international institutions is essential to achieve stability, balanced sustainable growth and higher employment.
Global Economic and Financial Prospects and Policies
In Europe, significant measures have been taken to strengthen the economic recovery. A return to healthy economies with sustained output and employment growth requires strong implementation of structural reforms, fiscal consolidation and strengthening financial sectors. Without such actions, growth levels will remain low and frustrate achieving fiscal targets, financial sector soundness, and above all employment growth as an anchor for social cohesion and welfare of our population.
Credible fiscal consolidation
Notwithstanding progress with fiscal consolidation, public finances remain vulnerable in many advanced economies because of persistently high debt, low growth and inflation, possible increases in interest rates, failure to contain spending pressures and contingent liabilities stemming from amongst others the banking sector.
There is no time to lose with consistently implementing credible medium-term consolidation plans with intermediate structural fiscal balance targets that are aligned with debt levels, financial conditions and the overall economic environment. Primary spending should be firmly contained or reduced and oriented to facilitate growth and efficiency. The latest Fiscal Monitor formulates valuable advice on how, in the face of limited or no room for raising overall tax revenues, there remains scope for making taxation more fair and efficient by minimizing distortions, broadening the tax base, eliminating inappropriate exemptions or tax expenditures, targeting negative externalities, such as carbon emissions, and avoiding tax rates that discourage investment or work.
Financial sector reform
A robust banking sector that allocates credit on a sound basis is essential for stability, sustainable growth and employment. The experience of the recent crisis has led to a global financial reform agenda. It also underlined the need for macroprudential policy frameworks to counter the build-up of financial imbalances. While overall progress on these fronts has been made, vulnerabilities are still present. Since the onset of the

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