The European economy might have contracted in the third quarter, EU Commissioner for economic and monetary affairs Mr Pedro Solbes said in a interview published today.
But neither the 15 countries that make up the EU nor the 12-country euro zone were facing a long recession, Mr Solbes told Frankfurter Allgemeine Zeitung. Most of his comments were given in reported speech.
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For the year as a whole, area-wide gross domestic product growth would average "substantially less than 2 per cent," he was reported as saying. Previously, the EU Commission had been forecasting average growth of 2.5 per cent for all 15 EU countries.
"Economically, this is one of the most uncertain times in the past 30 years," Mr Solbes said. But he urged European governments not to loosen their purse strings.
"The deteriorating performance of the economy is no reason for laissez-faire in stability programmes," Mr Solbes said. Governments should continue in their efforts to bring their budgets into balance or surplus in the medium term, he said.
Only those countries that had already met their commitments would be able to let their automatic stabilisers switch in, he argued.
AFP