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Home NATIONALPM calls for balance between austerity, growth
Tue, 21 Oct, 2014 12:20:12 AM
FTimes – Xinhua Report by Grandesso Federico, Oct. 21
"We need to find a balance between austerity and growth that's why we have the stability and growth pact and that's why there is an element of flexibility in that pact," the prime minister told Xinhua in a recent interview on the sidelines of the just-concluded Asia-Europe summit meeting in Milan, Italy.
"We should stop this artificial black and white debate between austerity and growth, they go hand in hand," he clarified, adding that "first you need fiscal prudence and economic stability thereafter you can get growth, now growth is much more complex than pumping public money into the economy."
The Finnish model could be interesting, he said Finland is a good example for the past years it has doubled the debt and pumped money into its economy and try to use all the mechanism of economic stimulus that it can use and yet it is zero growth.
"Remember that growth is not generated by the public sector but by the private sector with enterprises, entrepreneurs and workers," he said.
Talking about the current financial markets, Stubb said: "First of all we need to be cool, calm and collected; I felt the crisis basically advanced in three stages, the first was the financial crisis, the second was the debt crisis and now the third one is the growth crisis. "
"We should not make a return to the financial crisis and systemic crisis that we had, at this stage I'm not yet worried but anytime the markets are a little bit cheeky we follow them very carefully," he said.
Stubb also expressed his worry about the Ukraine crisis, saying: "Finland has a border of 1,300 kilometers with Russia and Russia is our biggest trading partner together with Germany and Sweden."
He added that people are "not seeing the cease fire working properly and do not see the peace plan working properly".
About the possibility of the EU lifting sanctions against Russia, his stance is very clear by saying: "We are looking at a frozen conflict in Crimea and at an unstable situation in eastern Ukraine therefore it would not be proper to lift sanctions at least this moment."
It is very unlikely that the EU could lift the sanctions at this particular moment. "More will have to happen," he said.
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