There is no need to fear economic recession in Europe despite increasing downside risks, the European Commission president Jose Manuel Barroso said on Monday.
"We have no rational reason to fear recession," Barroso said ina statement ahead of his unusual attendance at a regular meeting of eurozone finance ministers, which kicked off later today.
As fears were mounting over a possible recession in the United States due to continuous financial turmoil, the European economy was set to be affected and a slowdown seemed unavoidable this year.
While acknowledging Europe was not immune to problems in the United States, Barroso warned against too much pessimism.
"Europe is obviously not immune to the problems in the U.S.," he said, "But our circumstances are not the same as those in the U.S."
Barroso said he saw no current need for emergency measures like the 168 billion-dollar economic stimulus plan that the U.S. President George W. Bush is expected to sign later this week.
The European Union (EU), unlike the United States, took a conservative approach to the recent economic problems as both the world's major economies were hit by the financial turmoil, rising oil and food prices.
Dominique Strauss-Kahn, managing director of the International Monetary Fund, and U.S. Treasury officials have urged Europe to act to stimulate demand in response to a severe slowdown in the U.S. economy.
On Monday, Strauss-Kahn also called for a coordinated response to financial turmoil around the world.
However, finance chiefs from the Group of Seven (G7) industrialized nations concluded their meeting in Tokyo this weekend by leaving each of the world economic powers to take action appropriate to their circumstances.
"If we hasten into knee-jerk measures, we will end up undermining the strong fundamentals on which our measured confidence is based," Barroso said.
Instead, Barroso urged EU member states to keep government budget deficits down, an apparent swipe at France, which has been resisting the pressure to cut its deficit faster to meet a commitment to a balanced budget in 2010 made last April in Berlin.
"In times of growth, the opportunity for budgetary consolidation should be taken," he said, adding falling deficits could allow the appropriate use of economic stabilizers if required in the future.
Barroso said Europe must strive to deliver growth, jobs, low inflation and low interest rates consistently over time under the Lisbon Growth and Jobs Strategy.
"The stability, credibility and strength of the euro and the increased resilience of our economies, thanks in part to reforms under the Lisbon Strategy, are important reasons for confidence in Europe's ability to - with vigilance! - come through the current stormy economic weather," he said.
Earlier in the day, Barroso met Jean-Claude Trichet, Governor of the European Central Bank (ECB). In another rebuke at France, Barroso expressed his strong support for the independence of the ECB in handling the eurozone monetary policy.
French President Nicolas Sarkozy had been repeatedly calling for political voice in setting the EU's monetary policy. He said on Sunday that politicians should discuss subjects usually handled by the EU institutions, such as the euro currency.
France wants to see a lower interest rate and a falling euro to boost its weakening economy. However, the ECB chose to keep its benchmark interest rate unchanged despite the looming economic slowdown and continuous appreciation of the euro.
Source: Xinhua
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