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Euro zone steers debt crisis obstacles

Thursday, September 13, 2012 - 02:31

Sept. 13 - The Dutch election ended favourably for the euro zone chiefs who needed to keep their pro-Europe allies but the Greek austerity plan is yet to be approved. Joanne Nicholson reports

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European Union chiefs can breathe a sigh of relief - another obstacle to their plan for tackling the debt crisis has been cleared. Fresh from taking victory in the Dutch election, the Prime Minister, Mark Rutte, went straight into talks about forming a pro-European coalition government. Rutte speaks the same language as the German Chancellor - a language of austerity measures, reduced deficits and fiscal discipline in the euro zone. He wants to stimulate the Dutch economy and be strict with Southern European countries. Andre Krouwel, from VU University, says the voters have heard his message. (SOUNDBITE) (English) ANDRE KROUWEL, ASSOCIATE PROFESSOR, VU UNIVERSITY, SAYING: "People know the Dutch cannot survive outside the European framework. It is a large economy but it's not an internal market, we're an export country. So it's this duel feeling of being anxious about the power of Europe but at the same time, we need Europe." Other steps down the road to fiscal unity have been taken this week. The German constitutional court approved Europe's bailout fund - the European Stability Mechanism, much to Chancellor Merkel's delight. And the European Commission laid out its plans for ECB supervised banks. The banking union proposal will enable them to bypass governments and inject money directly into ailing lenders. But there are still hurdles to overcome - not least, Greece. Protests are continuing, over wage and pension cuts. It still hasn't signed off on its package of budget cuts worth 12 billion euros. The troika of lenders is assessing how it plans to meet them and is demanding even tougher action on the public sector workforce. They've approved measures worth 7.5 billion euros so far, but want to know where the rest is coming from. A package is due to be presented at a Eurogroup meeting in Cyprus on Friday but the Greek finance minister says they may have more pressing priorities. (SOUNDBITE)(Greek) FINANCE MINISTER YANNIS STOURNARAS SAYING: "This Eurogroup will be focussed more on Spain than Greece, of course I will express my opinion about the measures, so will the troika, but this is an informal meeting, no decisions will be no made." Even though it's been a fairly positive week for the euro zone, there's still a long way to go. A strategy is badly needed to revive growth, reduce debt and get the jobless back to work. Joanne Nicholson, Reuters

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Euro zone steers debt crisis obstacles

Thursday, September 13, 2012 - 02:31