The European Economic Affairs Commissioner, Mr Pedro Solbes, has predicted that Europe's economy could recover during the first half of next year. Speaking after EU finance ministers attended a meeting of EU leaders in Brussels, Mr Solbes painted an unexpectedly optimistic picture of Europe's economic outlook.
"The economic situation in Europe is not the best, but the prospects are good," he said.
He said the Commission expected the EU economy to grow by 1.6 per cent this year, compared to 3.4 per cent in 2000. It is expected to grow by just 1.3 per cent in 2002.
The finance ministers were careful to avoid giving any sign of dissatisfaction with the European Central Bank's reluctance to cut interest rates. Some European ministers believe that the ECB should follow the lead of the US Federal Reserve by cutting rates to boost growth.
The ECB president, Mr Wim Duisenberg, said in a German newspaper interview yesterday that it would only loosen monetary policy if inflation was lower than expected.
"The ECB would cut interest rates, if we came to the conclusions that our expectations for inflation need to be revised downwards in the next year and a half," he said.
Belgium's finance minister, Mr Didier Reynders, said next month's launch of euro notes and coins would boost efforts by member-states to reform their economies. European leaders have pledged to make the EU the most dynamic, efficient economic area in the world. "We stressed our determination to move forward on structural reform," he said.
However, the President of the International Monetary Fund , Mr Horst Koehler, told the finance ministers that they must work harder to undo structural problems. "The record to date falls short of the results we have all hoped for. The hope has been that the euro would prove a spur to stronger growth and job creation," he said.
Mr Solbes said many EU citizens remained inadequately informed about the euro, despite the fact that the launch of notes and coins was just two weeks away. Once Europeans have euros in their pockets, he said, they would reach a new understanding of the European project. "Europe will be tangible at last."
Mr Koehler said the euro was already a success and that it had created "a large, stability-oriented economic and monetary space" in a remarkably short space of time.
However, he said its failure to appreciate against the dollar was evidence of EU governments' failure to introduce necessary reforms. "Whether Europe likes it or not, many investors in Europe and abroad apparently still see the US economy as a more attractive place to invest," he said.
EU leaders failed to agree yesterday on the introduction of an EU patent, a favourite project of the Commission President, Mr Romano Prodi. Belgium suggested that inventors should be allowed to patent their inventions in English, French or German. Some member-states have argued that using three languages would make the process too expensive.
