EU finance ministers yesterday brushed aside doom and gloom economic forecasts, agreeing, in public at least, that while the Union might be in a "growth pause" it is not heading for recession.
Meeting against the backdrop of nervous financial markets and just days after the European Commission revised its growth; projections from 2.6 per cent to below 2 per cent, ministers were keen to stress they expected a strong pick up in the second half of the year.
Even in the absence of an economic resurgence, the French minister, Mr Jean Arthuis, said he believed the setback would have no effect whatsoever on the timetable for a single currency.
The Minister for Finance, Mr Quinn, echoed the positive mood, saying he did not expect the current slowdown to bring Europe into recession. Short term interest rates had fallen appreciably since mid 1995 and excess stocks were likely to be run off during the first half of the year.
The EU finance commissioner, Mr Yves Thibault de Silguy, spoke of a crisis of confidence rather than any more fundamental threat and said action was needed at both national and European level.
Germany and Britain, however, led a six strong group which rejected plans by the EU Commission President, Mr Jacques Santer, to divert surplus funds in the EU budget from sectors such as agriculture to job creating projects including big transport and telecommunications networks.
The six said any spare cash should be repatriated to national exchequers. Irish officials were critical of this rejection even before any formal proposals had materialised.
