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EU optimistic on economic recovery

03-01-2012 14:04 BJT

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A day after the ECB's second LTRO offering, leaders of the European Union’s 27 member countries will meet in Brussels later today. Despite increasing pressure from the IMF, the bloc’s national leaders have already ruled out discussing an expansion of the permanent bailout fund that will begin operation this year.

CCTV correspondent Jack Barton reports that while many Eurozone countries still want the new fund enlarged, there is a cautious optimism that the worst may now be over.

European Commission President Jose Manuel Barroso gestures as he addresses a news
conference on the eve of a two-day European Union leaders summit in Brussels February
29, 2012.

Brussels is gearing up for the first European leaders summit in quite some time that has not been overshadowed by a Greek crisis or forewarnings that the Euro could vanish altogether. The headline topic was supposed to boosting the firepower of the permanent bailout fund known as the European Stability Mechanism.

It starts operation in July in case countries like Italy of Spain get into serious trouble. But that discussion has been delayed until March, no doubt due to Germany’s instance that no more money is needed because in its opinion Spain and Italy are now recovering. Most countries want more money in the fund but agree Europe as a whole is looking up.

European Commission President Jose Manuel Barroso addresses
a news conference on the eve of a two-day European Union
leaders summit in Brussels February 29, 2012.

Jose Manuel Barroso, President of the European Commission, said, "Financial markets and the banking sector are indeed recovering. The risk of a credit crunch is receding thanks also to the decisive action of the ECB."

The meeting comes hot on the heels of the European Central Bank pumping more than half a trillion Euros into the banking sector Wednesday in the form of cheap three-year loans.

The Central Bank’s opening up of the money faucet in essentially backdoor quantitative easing with the aim of breathing some life back into Europe’s economy by easing the current credit crunch, putting money back into the hands of private householders and businesses.

The first half a trillion to be released back in December was credited as a turning point in the debt crisis. Gathered leaders will also sign a pact on closer fiscal cooperation and discuss the last touches of Greece’s second bailout.

There will still be divisions and almost universal pressure on Germany to start focusing less on austerity and more on stimulus. Nervous eyes will still look to Portugal to gauge whether it will need a second bailout.

And there is still the fact the Eurozone will need to battle a shallow recession in the first half of the year. But this will be the first leader’s summit in over a year that has not been described as make-or-break. That alone will probably boost confidence here that the EU economy may be finally on the mend.


Editor:Zhang Dan |Source: CNTV.CN

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