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Europe needs to become 'shock-proof': Dijsselbloem

Europe has come a long way since the height of the economic crisis that shook the region three years ago but it has a way to go to become "shock-proof," Eurogroup President Jeroen Dijsselbloem told CNBC.

"A little bit more self-confidence (is what is needed). There's been a lot of criticism about how the euro works, how the monetary union works and over time, since we started the monetary union we've built it up, we've strengthened it and so I think we're coming into a new phase now," the euro zone politician who played a key role in bringing Greece back from the brink of collapse this summer, told CNBC.

He said the euro zone's current phase was about stability and broadening the economic and political perspectives, the importance of which had been demonstrated by Greece's volatile summer before Prime Minister Alexis Tsipras agreed, albeit reluctantly, to a third bailout program.


Jeroen Dijsselbloem, Dutch finance minister and head of the group of euro-area finance ministers.
Jasper Juinen/Bloomberg via Getty Images
Jeroen Dijsselbloem, Dutch finance minister and head of the group of euro-area finance ministers.

"Europe is coming out of a crisis. Growth has returned to all but one of the euro zone countries and it's picking up and becoming broader. I think we should use this current stage to become more shock-proof," he told CNBC in Lima, where the International Monetary Fund/World Bank's annual meeting was being held.

"In order to do that we need to extend and complete the banking union, build a capital markets union to diversify the way finance comes to our economy and we need to push forward with the structural reforms to become even more competitive."

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"So for Europe, it's about getting more growth, increasing potential growth and making sure we become more shock-proof," he added.

Dijsselbloem's comments come as data point to a modest recovery in the 28-member European Union. In the second quarter of 2015, for instance, the EU and the 19-member euro zone grew at 1.6 percent and 1.2 percent percent respectively, from the same quarter in 2014.

Still, some of the region's biggest economies, Germany and France, have recently shown cause for concern, with lackluster manufacturing and service sector output and growth data. While in the second quarter, France had no growth at all from the previous quarter, Germany grew a meager 0.4 percent.

Dijsselbloem appeared optimistic, however, saying that current growth rates in Europe were "defying the pessimists" and that several countries such as Ireland, Spain, the Netherlands and Baltic countries were experiencing strong levels of growth.

In order to make those growth rates sustainable, however, Europe needed to deal with the "hindrances" in its economy, he said.

"We need to cut red tape, open up markets, make sure it's easier for people to start businesses and easier to get finance. If we deal with all these small, structural issues in our economy then I'm sure we can increase that potential growth with four percentage points."

- Written by CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt. Follow us on Twitter: @CNBCWorld