“This is perhaps worse than the recession of the 1990s, because there seems to be no prospect for growth in exports,” the Minister explained.
In the United States, the Federal Reserve has already slashed interest rates and the European Central Bank is expected to continue in the same vein in an effort to stimulate spending and consequent economic growth.
“The primary task of the European Central Bank is to ensure price stability, and there are currently no upward inflationary pressures, however downward pressures are now a concern. The European Central Bank has to ensure a balance. I expect that the cost of borrowing will fall next year,” assured the Finance Minister.
The construction sector has been hard-hit by the economic decline, and tens of thousands face the prospect of unemployment in the coming months. The construction industry could receive ten percent of government’s planned economic stimulus package to safeguard jobs in the sector.
“This is one measure that could be considered,” said Katainen.
The Minister stressed however that a primarily multi-sectoral approach is required to manage these difficult times. And he added that reduced interest rates could help restore economic confidence and activity.