The people holding Europe’s purse-strings have been meeting in Brussels against the backdrop of the stock-market sell-off. The general message from the Ecofin ministers was “don’t panic”.
The chairman of the Eurozone finance ministers, Luxembourg’s prime minister Jean-Claude Juncker said: “When financial markets act irrationally, and are driven by herd behaviour; when stock-markets demonstrate short-termism, there is no reason for finance ministers to do the same.”
They called for a sense of perspective, saying the economic situation in the US appears uncoupled from that in the US. There was a call for calm despite what was described as a “brutal correction” in the markets. And they said the fears are not about a global recession, but the risk of a downturn in the US.
Andrej Bajuk – the Slovenian president of Ecofin said: “We think that, basically, European economies are in good health, and much better than the US. Economic growth in the EU won’t quite reach our expectations for 2008, but the forecasts show that the economic reforms which have been made in the EU have strengthened the European economies’ ability to resist this kind of shock.”
The French and British governments have both tried to defuse fears, saying their respective economies are strong enough to weather the storm.