(For more on Europe’s debt crisis, click on EXT4.)
Feb. 1 (Bloomberg) -- European Union President Herman Van Rompuy said the bloc has reached a “turning point” in tackling the two-year-old debt crisis and urged further fiscal austerity to bolster investors’ confidence in the region.
Van Rompuy said “substantially” lower yields on Italian and Spanish bonds relative to benchmark German debt compared with several months ago signal that the euro area’s strategy for overcoming the Greece-triggered troubles and preserving the euro is paying off. He also referred to lower Irish yields.
“There is a positive reversal,” he told the European Parliament today in Brussels. “Is there a turning point? Yes. And I hope that we can continue along that line.”
European leaders agreed on Jan. 30 to speed the setup of a full-time 500 billion-euro ($660 billion) rescue fund for distressed euro-area governments, signed off on a German- inspired treaty to control budget deficits and pledged again to offer more aid to Greece provided it completes talks on a debt writedown by investors and deepens spending cuts.
“The most important thing that we can do -- and everyone agrees on this -- is for there to be a restoration of confidence,” Van Rompuy said. “When confidence comes back to the euro zone, the consumers and our companies will have confidence themselves and that will lead us inevitably to more economic growth.”
--Editors: Jennifer M. Freedman, Eddie Buckle
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