BERLIN, April 19 Crisis-stricken southern
European states are heading in the right direction with their
reforms but countries in the single currency bloc need to become
much more competitive, German Chancellor Angela Merkel was
quoted as saying on Friday.
"All southern European countries have more or less initiated
the reforms that are necessary to get them back on a sound
path," Merkel said in an advance copy of an article due to
appear in the German mass-circulation daily Bild on Friday.
She said she was aware that many people were suffering due
to spending cuts, but added that in the long-term countries
needed to cut their cloth according to what they produced.
"Every country needs a competitive economy and an industrial
base, be it big or small. We can no longer finance prosperity
with credit - that must be clear to everyone," Merkel was quoted
She said Germany was proof that reforms work. Labelled the
"sick man of Europe" a decade ago due to a rigid labour market,
ineffective bureaucracy and low competitiveness, Germany has
since become an economic success story thanks to labour market
reforms and years of wage restraint.
Merkel said euro zone states needed to become significantly
more competitive if Europe is to play a leading role in the
world. "There is still a great deal of work to be done on that",
she was quoted as saying.