For the first time since the global financial crisis began, economic imbalances in the eurozone as a whole have relaxed slightly, an Allianz report suggests.
The annual report titled the ‘Allianz Euro Monitor 2011’, reveals that the private sector in particular has managed to reduce debt levels significantly. The report, which Allianz says is “an early warning tool measuring … stability of the euro area” shows positive signs for the eurozone.
“2011 was evidently critical for the eurozone.” said Chief economist of Allianz SE, Michael Heise.
“The confidence of financial markets in the sustainability of sovereign debt is not yet restored. However, although overshadowed by the frantic discussions on financial markets about apocalyptic outcomes and a possible blow-up of the eurozone, there actually have been some encouraging developments, as the report shows.”
Ahead of this week’s EU summit, Heise says now is a time for action.
“EU leaders must map out a credible path to a workable fiscal union that banishes the dangers of fiscal profligacy for the future. This will require the pooling of fiscal sovereignty and a tight governance regime, including a Finance Commissioner with intervention rights, to ensure that public finances can no longer veer out of control.
“Leaders must demonstrate that Europe and the eurozone have not lost their direction. Half-baked or half-hearted measures will not suffice.”