19 September 2001, 14:54  U.S., Europe fundamentals sound-Reynders

BRUSSELS, Sept 19 - U.S. and European economic fundamentals remain sound although European growth for this year will have to be revised down in the wake of last week's attacks on U.S. cities, Belgian Finance Minister Didier Reynders said on Wednesday. He said non-euro zone members Britain, Denmark, Sweden would attend Friday's planned meeting of euro area finance ministers in Liege, Belgium. "We have good fundamentals in the Europe and the U.S.," Reynders, who currently chairs meeting of euro zone and EU finance ministers, told a news briefing. However, he said the EU must revise its growth forecasts for this year and perhaps discuss next year's forecasts. He said two percent European economic growth would have been an excellent result before the attacks on U.S. cities but indicated this could now be too optimistic. Reynders praised this week's interest rate cuts by major central banks. "The good decision was to take the decision together," he said. But it was "impossible to say" to what extent this week's rate cuts would cushion the world economy. He said the EU must stick to the stability pact, designed to maintain budgetary discipline in the region. However, he later said that budget discussions would take account of "corrections" linked to the current state of the economy. He said he had asked the European Central Bank and the European Commission to come up with a common analysis of measuring cyclically adjusted budget deficits.

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