IMF’s Belka: euro zone austerity may not hit growth

ZAGREB, May 15 (BestGrowthStock) – Austerity measures taken by
countries in the euro zone’s periphery should not have a major
negative impact on European Union growth, a senior International
Monetary Fund official said on Saturday.

Governments in Italy, Spain and Portugal agreed to cut their
public deficits this week as the euro zone grapples with the
fallout from Greece’s debt crisis, and some economists have said
the measures could depress demand and hurt the EU’s recovery.

“We don’t think the measures announced recently by countries
like Spain, Portugal and possibly some others, would have a
major negative demand impact,” said Marek Belka, director of the
IMF’s European department.

“If they have a positive impact on the market, then spreads
will fall and, on balance, this may have a slightly positive, if
not neutral impact on growth prospects.”

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(Reporting by Zoran Radosevljevic; writing by Michael Winfrey)

IMF’s Belka: euro zone austerity may not hit growth