European Union governments vowed Tuesday to start withdrawing hundreds of billions of euros (dollars) worth of stimulus measures by 2011 if the economy recovers steadily next year, reported ap. EU finance ministers said in a statement that the recovery «remains fragile and it is not yet time» to remove support to the economy _ such as tax breaks, extra public spending on infrastructure and financial sector aid, including bank recapitalization and asset guarantees. «Provided that the (European) Commission forecasts continue to indicate that the recovery is strengthening and becomes self-sustaining, fiscal consolidation in all EU Member States should start in 2011 at the latest,» they said. The European Commission will publish new economic growth forecasts on Nov. 3. Finance ministers said they would discuss a joint exit strategy when they meet next on Nov. 10. The EU"s 27 nations are also promising «ambitious» action to reduce mounting public debt and yawning budget deficits. They said most governments need to shrink their deficits more aggressively than by the 0.5 percent of GDP that they currently target annually. They also called for wider structural reforms to boost their economies" ability to grow. That could mean making Europe"s labor markets more flexible by allowing companies to hire and fire workers more easily. Many employers are reluctant to take on full-time workers that they cannot easily shed when business conditions turn sour. EU nations are also discussing the final shape of new financial oversight agencies that aim to prevent a repeat of last year"s financial crisis. Swedish Finance Minister Anders Borg told reporters before leading the talks that he expected «good progress» toward a deal EU leaders are likely to rubber stamp at an Oct. 29-30 summit to create a new economic risk watchdog and add new banking, insurance and financial market supervisors. «We have been in a period of very difficult financial turmoil and obviously we need to strengthen the traffic police role in this situation,» he said. Ministers will also discuss how much money the EU should give to developing nations to help them tackle climate change ahead of global environment talks in Copenhagen in December. Borg said «there are still complicated discussions that have to take place» but an agreement would show that Europe was ready to play its part in striking a Copenhagen deal.
