European Commission chief Jose Manuel Barroso on Monday said he did not expect Europe to slide into recession, calling the European Union and the euro "strong and resilient." On his first official visit to Australia, the Spaniard also stressed the need to strengthen the international monetary system and continue financial regulatory reform to help prevent any further economic crisis.
"We don't anticipate a recession in Europe. The latest forecast by the European Commission shows there will be growth, modest growth it is true," he said during a joint press conference with Prime Minister Julia Gillard. His comments follow rating agency Standard and Poor's last week saying a second quarter slowdown had increased the risk of a double dip recession in Europe, but that the region should escape with sluggish growth this year. The agency lowered its forecast for eurozone growth to 1.7 percent this year from 1.9 percent, with evidence of a slowing in some of the bloc's strongest economies.
Moving to reassure nervous markets, amid US debt woes and stagnant growth, Barroso added that the European Union and the euro were in good shape. "I want to be very clear here: the European Union and euro are strong and resilient," he said.
"We are doing all it takes from tackling the underlying budget problems to strengthening the governance of the Eurozone, from tighter financial regulation to improving our overall preparedness." On Greece, the EC chief, who heads to the Pacific Islands Forum in Auckland later this week, said it was premature to judge efforts by the Greek government to adhere to austerity targets demanded under its bailout terms.