EU finance ministers at their monthly meeting Tuesday pledged to cut their budget deficits aggressively. Some plans have already started while others begin in 2011. Even Germany, the 27-nation bloc's largest economy with one of the stronger budget positions, unveiled a plan to begin cutting its deficit in 2011. "The German program of fiscal consolidation, which is focusing on expenditure, seems to confirm and substantiate the consolidation strategy of the federal government," Rehn said at a press conference after the meeting.
Despite these cuts, the European Commission, the EU's executive arm, expects the EU economy to grow at 1% this year and 1.75% in 2011, Rehn said. "There are some risks, particularly related to financial stability, but on the other hand we are benefiting from the strong rebound in global trade," Rehn said. Spanish finance minister, Elena Salgado, backed Germany's move to trim deficits.
"As a member state we can only respect fellow member states' decisions, all the more so, when by doing so, they fulfill the criteria of the stability and growth pact," she said.
For more: 2nd UPDATE: EU Hopes For Economic Growth Despite Austerity Plans - WSJ.com
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