Germany Upbeat About Europe Economy
Mar. 27, 2001
MUNICH, Germany (AP) _ Chancellor Gerhard Schroeder said Tuesday the European economy was on a ``solid course of growth'' and that Germany's economy was fundamentally stable despite the slowdown in the U.S.
Schroeder said the construction industry was the sole weak point in the German economy _ mainly because of overcapacity. He tried to ease worries about the dramatic plunge in Germany's high-tech stock market, the Neuer Markt, which has fallen about 76 percent below its 52-week high last May.
``What is happening on the Neuer Markt doesn't worry me a lot,'' Schroeder said.
The chancellor said it was obvious that Germany's auto market, one of the economy's driving forces, would stagnate after reaching record highs last year. He added that German automakers could offset losses at home by turning to exports.
The European economy has been showing more signs that it is slowing as a result of the economic woes in the United States and Japan.
Figures released last week showed that industrial production in the 12 euro-zone countries fell 1.9 percent in January from December, far below economists' expectations of only a 0.2 percent decline.
Germany's respected Ifo index of business sentiment sank significantly in February, following January's surprising upturn.
That drop casts more doubt on whether Germany _ the EU's biggest economy _ remains as strong as German leaders insist. Germany accounts for roughly 35 percent of the economic output in the 12 countries using the euro common currency.
Schroeder has said he sees no need to revise his government's forecast of 2.75 percent growth this year, although many private economists have already shaved their projections to 2.5 percent.