Geneva, 24/02/2004 (Agence Europe) - In its annual report, "Economic Study of Europe", the Economic Commission of the United Nations for Europe (EC-UN) expresses its concern about the probable suffocating effect on the increasing economic recovery in Europe, provoked by the depreciation of the dollar.
"Given the strong rise in the Euro, which has little chance of changing in 2004, a reduction in interest rates appears today to be necessary in order to avoid a more restricted monetary environment", underline the authors of the report. An opinion that could be interpreted as a call for a nudge in this direction by the European Central Bank (ECB). The authors also state that it is even more necessary given that budgetary policy should be broadly neutral in 2004. The EC-UN also calls for Member States of the Euro-zone to introduce greater flexibility to the Stability Pact, explaining that it is important that the planned reform (of the pact) finds a suitable balance between the need to ensure medium and long term budgetary stability and the necessary flexibility of a budgetary policy that supports economic growth. The report considers that expanding the ECB mandate, which highlights the need to monitor both inflation, growth and employment, could be useful.