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ECOFIN soothes nerves during US financial crisis

European Commissioner for Economic and Monetary Affairs Joaquin Almunia cautioned on Tuesday, January 22, against panick in the wake of the financial crisis in the U.S.

European Commissioner for Economic and Monetary Affairs Joaquin Almunia cautioned on Tuesday, January 22, against panick in the wake of the financial crisis in the U.S.

At a session of finance ministers of the EU-member countries (ECOFIN) in Brussels, Almunia concurred with Slovenian Finance Minister Andrej Bajuk that the EU economy is built on solid foundations and that the economic reforms in place have significantly improved Europe's ability to withstand shocks such as the US sub-prime crisis.

The US crisis, which also came to involve major European financial institutions, has seen the assets of banks marked down by trillions of dollars. In response, the US is pursuing a policy of directly injecting money into the economy and lowering interest rates.

According to Slovak Finance Minister Ján Počiatek, there is a general awareness of how serious the current situation is, but at the same time it needs to be taken into account that the EU as a whole is now in a much better position than in the past.

"Our current-account balance is much more secure than the U.S.’s," Počiatek said. “Much the same goes for our fiscal position, and the employment rate. But the rate of job creation is different in its structure and scope.”

However, he admitted that a US recession would inevitably have direct or indirect repercussions in the EU as well, including Slovakia. TASR

Compiled by Zuzana Vilikovská from press reports

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