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EU Leaders Optimistic About EU's Economic Performance
The European Union (EU) leaders Saturday touted sustained economic growth amid U.S. and Japanese slowdowns as well as plummeting IT stocks on the Nasdaq and Easdaq markets.
"The EU economy stands stronger than that in earlier downturns, " said the heads of state and government from EU countries, though they admitted that the slowdown of the American economy, the continued weak economic performance in Japan and the declining global stock markets would influence the growth prospects in the 15-nation bloc.
Yet the EU leaders, who gathered for a review of the progress made on implementing their Lisbon decision, bolstered themselves with cautious optimism about the EU's economic performance in the past four years.
The EU leaders vowed in Lisbon, Spain, a year ago to forge the EU into the world's most dynamic and competitive economy by the year 2010.
The EU, they argued, has been in the process of economic recovery since 1996. The union posted an economic growth of 3.5 percent in 2000 and expects to maintain a growth of 3 to 4 percent this year. The growth projection will be announced in late April in the form of a spring version of economic forecast.
The leaders agreed that determined implementation of reforms and a balanced macro-economic policy would make it possible to continue to achieve an average growth of around 3 percent in the medium term.
Another indicator pointing toward positivity was the increase of employment in the EU members countries. With some 2.5 million jobs created since the Lisbon summit, the union-wide unemployment has fallen to its lowest level since 1991.
The average inflation also has been coming down to around 2.6 percent, according to the latest report by the union's statistical office Eurostat.
Sustained growth, substantial job creation and decreasing inflation combined have boosted the confidence of the EU leaders. However, they restated "foul play" at the international exchange markets that have kept underevaluating euro's exchange rate against the U.S. dollar.
Though the disability of the market has pressed the union's single currency down again along with the U.S. slowdown, the euro, due to start circulating next January, held steady at around 0.89 dollars, prompting calls for the European Central Bank to cut its key interest rates soon.
The EU leaders attributed their favorable economy to the restoration of sound public finances and the healthy economic fundamentals.
Pedro Solbes, EU commissioner for finance and monetary affairs, said the relatively strong growth in the EU has made the bloc, especially the euro zone, a safe haven for investors. "Growth this year will be substantially higher in Europe than in the other major developed economic regions," he said, but "this has not yet been recognized by the markets."
Swedish Finance Minister Bosse Ringholm said the EU was likely to take the "pole's position" in the world economy, while his French counterpart Laurent Fabius was more ambitious by saying that the union was set to replace the United States as the motor of the global economy.
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