A study from Europe’s leading financial service providers shows the country will get through the economic crisis in 2009.
Allianz SE and the Lisbon Council launched the autumn update of The European Growth and Jobs Monitor, which is their biannual performance ranking based on criteria from the Lisbon Agenda. This year, the ranking included an assessment of Europe’s economic performance during the present financial crisis.
The agenda alleges the economic recovery is expected to be due to Europe’s competitive corporate sector, smaller excesses on financial markets, high levels of person savings, an improving human capital base and strong public finances.
Before the above is considered, a strong economic policy must be implemented to overcome the crisis. The ranking also includes forecasts for 2009 and recommendations for policymakers.
According to the Lisbon Indicator, a reference for the European economy, states that growth and jobs fell 0.3 points from the second quarter of this year. The decline is due to a slower economic growth and labor productivity.
Fortunately, Europe’s workforce continues to improve and growth-oriented investments remain steady.
As inflation is set to decline, the agenda suggests that the European Central Bank should consider further interest rate cuts — lowering rates by 3 percent over the next six months. Other recommendations include:
- Countries without large fiscal deficits should stimulate their economies by creating tax and social security reforms, by providing investment incentives.
- Europe needs a revised global regulatory framework for the banking sector and financial markets.
- The fragmentation of the financial and banking markets should also be addressed.
“If governments act forcefully to combat the global financial crisis, I believe that Europe is well positioned for a recovery in 2009,” said Dr. Michael Heise, chief economist of Allianz SE.