EUROPEAN leaders declared yesterday that the EU should start moving away from austerity and look to other policies to boost economic growth.
Italy’s Prime Minister Mario Monti said concentrating on budget savings alone could leave the continent in a deep slump.
Responding to the European Central Bank’s (ECB) message that it was up to leaders to pull Europe out of its debt crisis, Monti said countries needed “new policy skills” as well as structural reforms and spending cuts.
ECB boss Mario Draghi earlier called for a “growth compact”, which was welcomed by French presidential front-runner Francois Hollande and other leaders.
European council president Herman Van Rompuy said growth was now “the highest priority”, while Belgian PM Elio Di Rupo said “I am pleading for a European pact on growth – we have to mobilise all our intelligence to put Europe back on track to prosperity.”
The EU has struggled to strike a balance between austerity and growth as it seeks to overcome a decade of runaway spending.
Britain and Belgium are suffering their second recession in just three years, while Greece is predicted to remain in a depression for years.
But with worried investors driving up borrowing costs for governments in Spain and Italy, countries have signed up to a fiscal compact to cut deficits.
EU president van Rompuy wants more GDP growth
City A.M. Reporter