Köhler, Horst --- "Toward a stronger Europe in the global economy" [2004] ELECD 146; in Liebscher, Klaus; Christl, Josef; Mooslechner, Peter; Ritzberger-Grünwald, Doris (eds), "The Economic Potential of a Larger Europe" (Edward Elgar Publishing, 2004)

Book Title: The Economic Potential of a Larger Europe

Editor(s): Liebscher, Klaus; Christl, Josef; Mooslechner, Peter; Ritzberger-Grünwald, Doris

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843769620

Section: Chapter 1

Section Title: Toward a stronger Europe in the global economy

Author(s): Köhler, Horst

Number of pages: 5

Extract:

1. Toward a stronger Europe in the
global economy
Horst Köhler1

1. THE GLOBAL ECONOMY

The global economic outlook is improving. Led by the United States,
prospects for a recovery are firming in the advanced economies. This is
good news for emerging market and developing country economies as well,
which have also benefited from a supportive financial market environment.
But we know that risks remain. Chief among these risks is the excessive
dependence of the world economy on growth in the United States and the
resulting global current account imbalances. Resolving these imbalances in
an orderly manner must be the primary objective of international economic
policy. And this requires a cooperative approach involving all major coun-
tries and regions:

In the United States, significant monetary and fiscal stimulus is in the
pipeline. But while fiscal policy has provided short-term support to
the economy, going forward it will be critical to restore medium-term
fiscal balance.
In the euro area, indications of an economic recovery are still more
tentative. But there are increasing signs of returning confidence and
it is encouraging that several euro area economies have initiated long-
overdue structural reforms, buoying expectations.
In Japan, recent data point to a much hoped-for firming of the short-
term economic outlook. And structural reforms in the corporate and
financial sectors must continue to be pursued vigorously to raise
longer-term growth prospects.
In emerging market economies, sound economic policies and struc-
tural reforms are bearing fruit in several countries. ...