Friday September 11, 08:38 PM
EU states must balance budgets rapidly: EU official
KRYNICA, Poland (AFP) - European Union states that have hiked deficits in order to combat recession must balance their budgets as quickly as possible, a senior European Commission official said Friday.
"The stimulus packages are financed by additional debt and we have excessive deficits now," European Union vice-president Gunter Verheugen told the XIX Krynica Economic Forum in this southern Polish mountain resort, known as the "Davos of the East."
"We must have balanced budgets as soon as possible," Verheugen said.
The crisis response must "not jeopardise the long-term objectives of the European Union" to become a "knowledge-based economy" meeting low carbon targets, the senior European Commission official said.
"In order to position the European Union on the higher end of the value chain... new spending priorities are needed," Verheugen said.
"This does not always mean that we have to spend more money. We need to put more emphasis on money we spend on education, research..." he added.
"The economy is no longer in free-fall. We have stabilisation, but definitely at a much lower level," than before the crisis, he said.
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