European finance ministers along with central bankers are meeting in Portugal looking for ways to protect the EU economy from global market turbulence. A boat trip on the Douro river in Porto launched the brainstorming session involving finance officials from the 13 countries whose currency is the euro.
Hosting the meeting, Portugese Minister Fernando Teixeira dos Santos said they were all in the same boat. Eurogroup chairman, Luxembourg’s Prime Minister Jean-Claude Junker, commented on the impact on the eurozone economy of fallout from the US sub-prime sector. “We still think that economic growth in 2007 and 2008 should be solid, reaching around the potential for growth,” he said. “But there are risks that have arisen stemming from the developments on the financial markets.”
On the financial market turmoil, Junker believes that those developments will have only a slight impact on European growth this year and next. His opinion is shared by many of the European finance ministers meeting in Portugal. Some eurozone officials note that there is concern about economic performance in France, where growth estimates have taken a downward slide since early this year.
Luxembourg’s leader says he expects France to step up its efforts to cut back on public expenditure. The global credit crunch has its origins in the United States. But this cloud has a silver lining for Europeans travelling to the US. They stand to benefit from the euro’s exchange rate against the dollar to the tune of 30 percent over Americans paying in dollars for the same goods.