Europe Economic Outlook-IMF

Independent Films, Politics

Europe is experiencing a quiet confidence according to Antonio Borges. However, it can also be characterized as the tale of the Two Europes, the haves and have nots, the employed and the jobless.

At 2.4 percent, economic growth in Europe in 2010 came in a bit stronger than anticipated. For 2011 and 2012, the IMF is predicting growth to continue at a similar pace, according to the IMF’s latest Regional Economic Outlook for Europe.

Growth is set to be stronger in Europe’s emerging market economies than in its advanced economies. For both parts of the continent, downside risks to the outlook dominate, with the sovereign debt trouble in the euro area being the most pressing challenge facing policymakers.

“Europe is doing well overall in general, both Western Europe and Eastern Europe, and this is very important to realize that overall our projections for the forthcoming months are actually quite positive. However, it is quite clear at the same time that there are big differences across Europe. Some countries are doing very, very well; others are still growing modestly, and we’re concerned with that. Some countries are doing very, very well; others are still growing modestly, and we’re concerned with that,” Borges said.

“One of the most surprising elements of the outlook for Europe is the export performance of some of the core countries. This is remarkable. Of course, this means that Europe is benefiting from the general growth that is taking place throughout the world. And this proves a very important point, which is that European integration is delivering efficiency gains that some countries are taking advantage of to become more competitive throughout Europe,” he added.

Substantial measures have already been put in place in the euro area to overcome the crisis. At the national level, strong adjustment policies are being put in place to rebuild and bolster confidence. At the regional level, the crisis management capacity of the European Union (EU) is being strengthened, and the governance framework revamped. Important actions are still required to deal decisively with weak banks across Europe’s advanced economies, and to follow through with implementing the EU-wide reforms that have been agreed in principle.

“Banks and the financial sector in general have been a source of concern throughout the world as a consequence of the financial crisis of 2008-2009. In other parts of the world, in the U.S. and in Britain, banks have made more progress than they have on the continent of Europe. Europe has lagged behind to a certain extent, and that is a source of concern.

Banks need to be recapitalized. They need to have stronger balance sheets. This is possible to do. There’s plenty of capital in Europe and, in fact, quite a few countries that have already gone down this road have proven successful. So this is where some decisive action is required,” Borges said.

Directors:

• Muhamed Sacirbey UNTV-IMF

Producers:

• Susan Sacirbey