Eurozone countries should analyse one another's economic policies much more stringently and try to spot potential trouble much earlier to avoid a repetition of Greece's budget crisis, dpa cited the new European economic commissioner, Olli Rehn, as saying today. Successive Greek governments have failed to modernize the economy by trimming the bloated and corrupt public sector or boosting exports and productivity, leaving the country fatally exposed to the world economic downturn. The country's woes worsened when the newly-elected socialist government in October revealed that its predecessor had presented wildly inaccurate budget figures in an apparent attempt to hide the extent of the problem. "The critical lesson from this crisis is that we urgently need deeper and broader surveillance of economic policies, including earlier detection and tackling of imbalances, in order to better safeguard the macro-financial stability of the euro area," Rehn said in a statement. Greece has faced intense pressure from financial markets in recent months, throwing the eurozone's own stability into doubt. The scandal has led traders to question the EU's ability to make its members maintain a sound economic policy. To answer those questions, Rehn said that the EU executive, the European Commission, "will soon come forward with proposals to further strengthen the coordination and the surveillance of national economic policies within the euro area." On Thursday eurozone leaders meeting in Brussels took the unprecedented step of issuing a formal commitment to preserve financial stability in their area, but said no Greek bailout was necessary - for the moment. EU financial ministers are set to approve Tuesday a draconian austerity plan that foresees a reduction of the Greek deficit to 3 per cent of GDP, the level recommended in the eurozone, in just three years, and places the country under regular commission scrutiny. They are also expected to discuss a commission proposal to give the EU's statistical office, Eurostat, the right to audit national figures, in a bid to keep government reporting honest. Rehn called on Athens "to do whatever is necessary, including adopting additional measures" to respect the new targets, insisting that its deficit needs to fall by 4 percentage points this year. The commission is set to issue in March the first of its regular assessments on the effectiveness of Greek budget cuts. Rehn stated it "will propose additional measures if necessary."
