“I think that people are worried about Europe,” Moscovici said, reiterating that the EU will continue its efforts to lift the 17-nation euro region out of recession. His German counterpart told reporters the focus should remain on expanding the workforce.
“High unemployment must be avoided,” Finance Minister Wolfgang Schaeuble told reporters in Moscow.
Europe is the weakest component in a three-speed global economy that includes fast-growing emerging markets and a medium-paced U.S., South Korean Finance Minister Hyun Oh Seok said in an interview yesterday. He said the EU has reduced the risk of a new shock and now needs to pursue structural reforms, noting that the euro area’s crisis-fighting strategies haven’t always been effective.
Markets overreacted to Bernanke’s initial signal that the Fed may start to cut back on its $85 billion in monthly bond purchases, Italian Finance Minister Fabrizio Saccomanni said in an interview today. He said there’s now an understanding that central banks will provide liquidity as long as needed.
“Emerging economies make a lot of being the victims of policies of industrial countries, including the European ones, that push up the value of their currencies,” Saccomanni said. “But you know, one could easily make the counterargument -- assume that we were following very tight policy in a situation like this, I think the spillover on the emerging economy would be even harder.”