Eurozone Officials Admit The Bloc Isn't Out Of The Woods Yet
The euro settled at $1.3681 at 4:15 GMT on Monday morning after eurozone policy makers admitted that the region's governments still have a long way to go until recovery becomes a certainty.
The Wall Street Journal reported that although the bloc's economic problems didn't dominate the World Economic Forum for the first time in years, there are still concerns about the stability of the region's recovery. The eurozone is still battling with several issues like high unemployment figures, lower than expected inflation and large amounts of government debt.
Dutch finance minister Jeroen Dijsselbloem said that the region's recovery would be a slow process with several countries in need of new labor market laws before unemployment rates will drop to reasonable levels. However, he pointed out the great strides the eurozone has made since last year, when the world debated the future of the eurozone and the single currency.
EU economics chief Olli Rehn pointed out that the bloc's December inflation figure of 0.8 percent was worrisome and that the European Central Bank should make a move to correct it. Eurozone inflation has slowly been declining for months, causing worry about the bloc slipping into a period of deflation. The International Monetary Fund has estimated that the region has a 15 to 20 percent chance of experiencing deflation.
France was also under fire at the forum as many believe the nation has not done enough and is dragging down the bloc's recovery. Recently, French data has been lackluster at best, dragging down the progress made by other eurozone members. Moving forward, all eyes will be on a new French economic plan which includes a series of spending cuts and tax amendments designed to kick start growth and help lower unemployment figures. More importantly, the plan is expected to reduce government spending to 53 percent of GDP.
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