BRUSSELS, Sept 24: The crisis roiling the financial sector is weighing on the European economy but Europe does not so far need a US-style bailout plan, the European Commission’s top economic official said on Wednesday.

“There can be no doubt that events in the financial sector are hurting the real economy,” Almunia told lawmakers at the European Parliament.

Earlier this month, the European Commission estimated that Europe was on the brink of recession although the prediction was made before the latest round of turmoil which saw the US government forced to draw up a massive 700 billion dollar bank bailout plan.

In the wake of those developments, Almunia warned that “the economic situation and outlook remain unusually uncertain.

“Risks to the growth outlook remain on the downside, while risks to the inflation outlook are on the upside,” he added.

A series of economic sentiment indicators across Europe this week painted a dark picture, with confidence hitting the lowest levels in years in many of the major economies in the region.

While hailing the US plans to buy up the bad debt clogging credit markets as a “good initiative,” Almunia noted that EU finance ministers had judged similar programmes not to be necessary in Europe.

“The situation we face here in Europe is less acute and member states do not at this point consider that a US-style plan is needed,” he said.

Nevertheless, Almunia added: “The latest events in financial markets have made it clear that the current model of regulation and supervision needs to be revamped.”—AFP