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Grybauskaite: high risk of second wave of crisis in Europe

Danuta Pavilenene, BC, Vilnius, 29.06.2012.Print version
Europe must decide whether it is taking the path towards the enhancement of integration or risking the eurozone existence, said Lithuanian President Dalia Grybauskaite ahead of the European Council meeting in Brussels yesterday.

The head of Lithuania is forecasting that Europe will be hit by a second wave of crisis, informs LETA/ELTA.


"The biggest challenges have to do with the current complicated situation in Europe which in fact has not improved since late 2007 when the global financial crisis started. Now a number of heavily-indebted countries have enormous government debts, as a result the markets are reluctant to lend to some particular countries. That all allows us speaking about a risk that Europe is about to face a second wave of crisis," she said to Lithuanian reporters in Brussels.


Grybauskaite expressed her belief that this time Lithuania is safer and stressed a 3 percent state budget deficit and fiscal discipline, both of which should be followed by the future political forces in Lithuania.


Dalia Grybauskaitėhas underlined that global economic growth rates dictate the necessity to strengthen European economic and political integration.


The EU Heads of State and Government, who have gathered in Brussels, are looking for ways to combat recession and to boost Europe's economic growth.


"In this European Council meeting we will have to take decisions for Europe's future. Europe is not able to counter global financial challenges and ensure economic growth. The second wave of recession is approaching. Failing to take on time the decisions to strengthen the EU integration, we are putting the future existence of the euro zone at risk. We all will bear grave consequences," the President said.


The agenda of the meeting includes the endorsement of the Compact for Growth and Jobs.


The Lithuanian leader noted that the European Union had to act consistently in two directions – to observe stringent fiscal discipline and, at the same time, to implement measures designed to boost economy. According to the President, economic growth cannot be stimulated by increasing the debt of the countries.


The European Council meeting will provide country-specific recommendations for boosting economy. The recommendations to Lithuania include the reduction of deficit, the implementation of pension reform, the promotion of jobs, especially for youth, the reduction of poverty and social exclusion, the reform of state-owned enterprises, and improved energy efficiency in buildings.


During the meeting, President of the European Council Herman Van Rompuy will present a report, prepared in close cooperation with the Presidents of the Commission, the Eurogroup and the European Central Bank, which sets out proposals to reform the Economic and Monetary Union. This process should involve all euro zone members and the EU countries aspiring for membership. The report includes suggestions to ensure a single European banking supervision system, to create common mechanisms to guarantee customer deposits, to strengthen fiscal union, and to shape an integrated economic policy framework.

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