Eurozone governments should use their strong current economic performance to put their finances in order, DPA quoted the European Commission as saying Thursday. "Policy-makers must strike while the iron is hot," said Joaquin Almunia, the European Union's monetary affairs commissioner. Almunia said the 13 eurozone governments must put their public finances on a firmer footing, implement reforms that will increase the euro-area's growth potential and show "leadership on global issues." The commission - the EU's financial watchdog - said the euro-area economy had gone from strength to strength in the last 12 months. Gross Domestic Product in the eurozone grew by 2.7 per cent in 2006, its fastest growth rate since 2000, and well-above its long-term average. Employment growth accelerated to around 1.5 per cent in 2006, yielding an increase of close to 2 million new jobs and inflation remained around 2 per cent. As a result the eurozone was on a strong footing to face the challenges which still lie ahead, including efforts to raise potential growth, enhance adjustment to economic shocks and ensuring a successful enlargement of the euro area. The current buoyant performance of the euro-area reflected a cyclical upturn of the economies but was also the result of recent fiscal consolidation and governments' commitment to structural reform, the commission said. It added that the robust economic growth performance last year had led to a greater-than-expected fall in the euro-area's budget deficit to 1.6 per cent of GDP in 2006, down from 2.5 per cent in 2005.
