German Chancellor Angela Merkel said euro-area governments struggling in the debt crisis must press ahead with economic overhauls or face greater pain later.
Countries “from Ireland to Portugal to Spain and Italy” have “set a lot in motion” on structural reforms, Merkel said in a speech to the BGA export-industry association in Berlin today. Change “was urgently needed, but also hadn’t been dealt with for a long time.”
Merkel’s comments reflect her insistence that boosting competitiveness, with changes such as lowering labor costs in the 17 countries sharing the euro, is the key to beating the debt crisis now in its fourth year.
“Of course, all of this leads to incredible sacrifices for the people in those countries, but we also know that if it doesn’t happen now, the pain will be worse tomorrow or the day after,” Merkel said. “We can’t stop at the halfway mark. Rather, we have to keep moving on this path because there’s no way around the competitiveness issue.”
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