The EU's economic and monetary affairs commissioner has warned that the European economy is not immune to the impact of a war with Iraq, particularly if oil prices rise sharply Pedro Solbes said today that a potential war could dampen EU growth by 0.25 percentage points if it prompts a sustained USD10 per barrel hike in the oil. He also said a war with Iraq would mean further downside risks to the European Commission's growth forecasts. The commission today cut the EU's 2003 growth forecasts to 2.0pc from 2.9pc in April. It slashed the eurozone forecast to 1.8pc and said the euro area would expand by just 0.8pc this year. That would mark the slowest growth in nine years, adding to pressure on the European Central Bank to lower interest rates. The Commission cut 2003 Irish growth forecasts to 4.2pc from 6.1pc
Iraqi president, Sadddam Hussein, has until Friday to respond to a UN resolution to allow weapons inspectors back into the Gulf State. The Iraqi parliament has already recommended rejection of the UN statement, increasing the chance of military action //www.fxcentre.com