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Home >> Business
UPDATED: 10:03, September 09, 2006
Juncker re-elected Eurogroup president, voicing optimism over economic growth
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Luxembourg Prime Minister Jean-Claude Juncker was re-elected as the president of Eurogroup for the next two years, and the 12-state economy is in an optimistic mood over its economic growth.

EU finance ministers and central bankers met here on Friday for two days of informal talks on the region's economy.

At a press conference after the finance ministers' meeting, Finnish Finance Minister Eero Heinaluoma, whose country holds the current EU presidency, announced Juncker's re-election.

He said the decision had been made by the ministers "unanimously" on Friday morning.

Juncker's term as the president of Eurogroup is to expire at the end of this year. Juncker himself is also the finance minister of Luxembourg.

During the meeting, the finance ministers also expressed their optimism and confidence over the bloc's economic prospects.

"I agree with the fundamental analysis the (European) Commission made early this week," Juncker told a press conference after the meeting.

Earlier on Wednesday, the European Commission had estimated that, driven mainly by domestic demand, particularly investment, the economic growth of the Eurogroup would increase by 2.5 percent this year, its strongest growth since 2000.

"I'm reasonably optimistic," and "We have good reason to believe that we have good prospects," said Juncker, adding that the Eurogroup was "moving in the right direction."

However, Juncker also noted the factors challenging the smooth expansion of the Eurogroup economy, particularly high oil prices, which might fuel inflation.

Joaquin Almunia, the European commissioner for economic and monetary affairs, expressed a similar mood of optimism, but he added that international political tension was another factor that might hinder the Eurogroup's economic expansion.

Juncker told the press that there was no difference between the assessments of the Eurogroup, the European Commission and the European Central Bank (ECB) on the outlook for growth in 2006 and 2007.

"All three of us are thinking that economic performance in Europe will be increasingly robust. We do think that the European economy is on a good track," he said.

ECB President Jean-Claude Trichet told the press conference that disorderly moves in exchange rates were negative for economic growth.

"On the exchange rates question, I [believe] that excessive volatility and disorderly movements in exchange rates are undesirable for economic growth," he said.

In recent weeks, the euro has appreciated strongly against the yen.

Juncker echoed Trichet's concerns over exchange rates by saying that "any sharp move in the exchange rate leads to certain risks and is not welcome."

Trichet also reiterated that the ECB was exercising "strong vigilance" against inflation risks. He said that the central bank had tended to send a signal when it was preparing to hike interest rates.

Source: Xinhua

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