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ALPBACH, Austria (Reuters) - The fragile European economic recovery seen in the second quarter should continue into next year and become more solid, the European Commission's top economics official told Reuters on Thursday.
Olli Rehn said greater fiscal credibility in euro zone countries, action by the European Central Bank to stabilize markets and better economic governance had all strengthened the currency bloc's ability to withstand political shocks.
"The euro zone is less sensitive to political turbulence," Rehn said in an interview, contrasting its current state with its previous greater vulnerability to derailment by such upsets as Italian and Greek political turmoil or the Cyprus debt crisis.
"The recent both hard data and soft indicators on consumer confidence and purchasing managers' expectations are supportive of a subdued sort of recovery this year and a somewhat more solid recovery next year," he said.
"Not brilliant, but nevertheless a more solid recovery. And we should see next year also more improvement in employment," Rehn said on the fringes of an economic conference in the Alpine village of Alpbach, Austria.
Rehn had told reporters earlier there were signs of a gradual recovery in the euro zone but it was premature to say the crisis was over.
He added that Greece was making good progress but a decision on whether Athens may need a third bailout could not be made until the so-called troika of its international creditors completed an assessment in late September and early October.
"Its economic reforms are moving forward better than in the first two years of the reform program because there is now broader - not full, but broader - consensus in Greek society for reform," he said.
German Finance Minister Wolfgang Schauble said earlier this month that Greece would need a third bailout, a statement that prompted an outpouring of officials saying nothing was planned yet.
Additional reporting by Angelika Gruber Editing by Jeremy Gaunt