Tuesday, January 22, 2008
Europe’s “solid, sound fundamentals”
“The main reason [for the turbulence] is the risk of a recession in the US. It’s not about a global recession. It’s about a recession in the US, because big imbalances have built up over the years in the US economy – a big current account deficit, a big fiscal deficit and a lack of savings,” said Joaquín Almunia, the European Union’s monetary affairs commissioner. Mr Almunia contrasted imbalances in the US economy with what he described as Europe’s “solid, sound fundamentals”. “We have a positive current account position. We have a level of savings that is the level required to finance our investments. We have improved our fiscal positions a lot. Moreover, we haven’t got subprime mortgages in our financial systems,” Mr Almunia said.