VALENCIA (Spain), Oct 26: Europe should avoid falling into recession despite slower growth in the United States, European Economic and Monetary Affairs Commissioner Joaquin Almunia said on Friday.
“I’m not very pessimistic. There is a certain slowing down going on in the United States and a less pronounced slowdown in Europe. I don’t think we’re going to go in recession,” Almunia told an audience at the University of Valencia.
The Commissioner added that the risks to the European and world economies were now slightly less acute now than at the height of the credit crisis.
He said Europe was not entirely dependent on the US economy to sustain growth while China and other emerging economies ticked along at 10-11 per cent annual growth, as long as US growth did not slow to less than an IMF forecast of 1.9 per cent this year and next.
“Without playing down the risks that the central scenario does not play out ... the probability is less than a few months ago,” Almunia said, referring to a European recession.
However, in an interview with Reuters, Almunia stressed that world economy required international exchange rates to reflect reality.
Western countries have called on countries including China to make their exchange rates more flexible.—Reuters
