People haven’t bought into austerity-led policies, warns Barroso

23 Apr 13
The European Commission president has warned that citizens' tolerance for austerity policies is running out.

Speaking in Brussels yesterday, José Manuel Barroso said while he believed policies aimed at reducing unsustainable public and private debt were ‘fundamentally right’, he also believed European Union countries were 'reaching the limits of the current policies’.

He added: ‘I think it has reached its limits in many aspects, because a policy to be successful not only has to be properly designed. It has to have the minimum of political and social support.

‘We need to have a policy that is right. At the same time, we need to have the ways, the means of its implementation and its acceptance, [politically and socially].’

The European institutions and member states had failed to fully explain ‘what was at stake’ and to build the necessary support, Barroso acknowledged.

He claimed, however, that the commission had 'never and will never’ proposed economic policy based solely on reducing a government’s deficit. It had instead outlined a ‘comprehensive approach’ that also took into account trade and structural reforms.

Reducing huge deficits and debt was ‘indispensable’, but had to be complemented by a stronger emphasis on growth and growth measures in the shorter term, he explained.

‘We have been saying this, but we should say it louder and clearer. If not, even if the policy of correction of the deficit is basically correct, we can always discuss the fine-tuning, the rhythm or the pace, but that will not be sustainable politically and socially,’ he added.

His comments came as figures published by the statistical service Eurostat yesterday revealed that, while austerity helped to bring deficits in the eurozone and EU down as a whole last year, debt levels continued to increase.

Debt-to-gross domestic product ratios improved in just six EU countries. They worsened in 21, including those carrying out austerity programmes as part of their bailout commitments, such as Ireland and Portugal. In Greece, debt levels fell, but the country’s debt-to-GDP ratio of 156.9% is still the highest in Europe.

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