EU Ministers Refuse to Cede to Fears for Economy
Despite concern over the U.S. economy, European finance ministers stuck to forecasts of solid
economic growth in their part of the world this year as a second day of policy talks got underway in Brussels on Tuesday.
Dutch Finance Wouter Bos described Europe's growth prospects as "very good" if prone to risks such as a dollar slide, high oil prices and, perhaps, the slump in the U.S. housing market.
"The risks are well known: the American dollar, the oil price and probably, but we're not quite sure -- the experts have differing opinions about that -- the American housing market," Bos said as he entered the talks with EU colleagues.
However, asked if he saw any indication of a spillover into Europe of U.S. mortage market problems, he said: "No signs."
Finance ministers of the 27 European Union nations convened on the heels of a Monday dinner among the 13 EU members in the euro currency zone, where the emerging message was primarily one of confidence, tinged with caution.
"Why do you always concentrate on the horror scenarios?" German Finance Minister Peer Steinbrueck asked reporters. "The European economy is developing strongly and there are
many reasons to be optimistic."
The European Commission forecasts euro zone economic growth of 2.4% this year after 2.7% in 2006, which was nearly double that of 2005 and the best performance since 2000 -- the year before the dot.com bubble burst.
Jean-Claude Juncker, chairman of the Monday talks, said he and collegues saw no reason to fret overly about recent wobbles in world stock markets, referring to several bouts of nervous
selling since a slump on the Shanghai bourse in late February.
"We take the view that this is a normal sort of correction but also feel we have to keep a close eye on developments over coming weeks and months," Juncker told a news conference.
"There is no reason for us to be worried because economic growth in the euro area remains strong in the short and mid-term," he said.
The matter was likely to be broached at a mid-April meeting of the Group of Seven industrial nations in Washington.
European shares got off to a positive start on Tuesday after a Monday drop that was put down to official news of weak home sales in the United States, something markets are watching
closely for signs of wider economic damage.
Macro-economic matters were not the sole focus in Brussels.
Ministers were also expected to endorse plans for a shake-up that make it cheaper for EU citizens to settle bills that often cost far more at the moment if they are cross-border than if
they are within a person's home country.
"Unless the sky caves in on us, we will have a compromise on this in the council (of ministers)," one diplomat said.