Juncker:Europe should establish common response to economic slowdown

NICE, France, Sept. 12 (Chinese media) -- Eurogroup Chairman

Jean-Claude Juncker said here Friday that it was better to establish a common

response in Europe to the economic slowdown.

The Eurogroup should work out a common response

rather than uncoordinated national responses in the face of "a shock that

affects us all in common," Juncker told a press conference after a meeting of

Eurogroup finance ministers.

"Faced with a shock, which as I said is largely

symmetric, budgetary policies should not deviate from collective rules," he

said, adding: "I am thinking of the Stability and Growth Pact, a pact which

contains rules that allow a certain amount of flexibility."

Juncker, who won unanimous support at the meeting for

staying as head of the Eurogroup for another two years, predicted that energy

prices would remain at a high level while economic growth would be at a slow

pace.

"We're affected by the slowdown in the world

economy," he said, "We have to get used to the fact that energy prices, though

they have fallen in recent weeks, will remain at a high level."

"Overall, growth will remain low" and "more sluggish

than expected," Juncker said.

Juncker, who rejected the speculation that Europe is

on the brink of recession, said: "the depreciation in the euro recently is

welcomed even if the euro remains overvalued."

The decline in the prices of oil and commodities was

another blessing to help "restrain prices," he noted.

In an interim forecast released Wednesday, the

European Commission cut economic growth in the 15-nation euro zone for 2008to

1.3 percent, down 0.4 percentage points compared with its predictions in April,

while in the 27-nation EU, forecasts were lowered to 1.4 percent, down 0.6

percentage points.

EU finance ministers gathered here Friday for a

two-day informal meeting to discuss the economic situation in Europe and search

for ways to strengthen financial stability.