7 September 2001, 12:35  Prodi says euro zone stability pact must not be changed

MILAN (AFX) - The euro zone stability pact must not be changed despite the economic slowdown, at least until Europe has a political mechanism in place to deal with asymmetrical developments inside the euro area, European Commission President Romano Prodi said. Speaking in an interview with Italian financial daily Il Sole 24 Ore, Prodi said: "The stability pacy must not be changed, or else it would send a message of weakness on the eve of the arrival of the euro in the pockets of European citizens." Asked whether an easing of the pact would not give Europe more US-style flexibility to deal with the economic slowdown, Prodi said Europe would first need the political mechanisms to deal with asymmetries inside the single market. "When it (Europe) has those mechanisms, it will be able to think about how to revise the stability pact. "On the other hand, having a truly European economic policy is absolutely necessary to fully benefit from the great promise of the euro and the (EU's) expansion to the east," he said. On the global economy, Prodi said that "for some months now, the growth data publications have been looking like a strip tease -- every time a little bit less." But he added that he does not believe the crisis to be "enormous" or lengthy. He reiterated calls for the Italian economy to become more flexible and competitive, and said the government should try to develop the economically backward southern half of the country into a "zone of technological excellence."

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