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Euro-zone economy better than US counterpart

The fundamentals of the euro-zone economy were stronger, than those in the United States, Jean-Claude Juncker, Prime Minister and Finance Minister of Luxembourg said here Monday.

So far there was no evidence that euro-zone economy was suffering as a result of US slowdown, Juncker, also chairman of the Euro group of finance ministers, told a press conference after a meeting of finance ministers from the 15 nations using the single currency. “We feel comfortable with our economic situation at the moment,” he said, calling on ministers not to over-react to Monday’s heavy losses of the stock market. “Compared with the US our fundamentals are very solid,” he noted, saying that the EU economy “has not been hit by the turbulence on markets and we continue to assume the impact will be fairly limited.”

The euro zone needs no a special fiscal package to stimulate growth as the United States did, Juncker add. But he warned that the current economic situation was “highly volatile and uncertain,” saying that the possibility of a recession in the United States existed. He said a US recession would hit euro-zone growth but European consumers had no need to worry. He urged the euro zone governments to continue their effort to keep their budgets close to balance by slashing structural deficit by 0.5 percentage point yearly as stipulated by EU’s Growth and Stability Pact. US President George W. Bush’s administration agreed on Friday with the US Congress on a plan of $150 billion to boost economic growth. Also speaking at the press conference, European Commissioner for Economic and Monetary Affairs Joaquin Almunia said that even though growth this year “will probably be below potential, it won’t be by much.” (