By Chris Jones - 4th December 2006
The European central bank should think twice about raising eurozone interest rates later this week, EU business leaders have warned.
“This is not the right time to raise interest rates,” said Pierre Simon, president of Eurochambres, the association which groups together chambers of commerce from across the EU.
“The ECB needs to focus on economic development, especially in light of the continued depreciation of the dollar against the euro,” he added.
Henri Malosse of the EU’s economic and social committee, added that there was no political counterbalance to the ECB from the eurozone member states and that this meant that the bank did not necessarily always see the big picture.
“There should be more debate on interest rates, and we need to see more political integration at EU level on economic policy.”
The two men were speaking at the launch of the annual survey of business confidence in the EU published by Eurochambres, which showed that companies remain optimistic about further growth.
“The results of our survey show that business in Europe remains optimistic of growth – more so even than the European commission,” said Arnaldo Abruzzini, secretary general of Eurochambres.
He said that commission forecasts for 2007 showed a predicted downturn in economic growth that was out of kilter with business expectations, which remain consistently high.
And despite the optimistic outlook, Eurochambres warned that there was still much that needed to be done to ensure sustainable growth.
“EU growth is forecast to be around 2.8 per cent this year, but this is still half the average rate for the world as a whole, and this is unacceptable,” said Simon.
“The EU needs to tackle its identity problem and present itself as a single political and economic player if it wants to be taken seriously.”
“We also need to see the full implementation of the Lisbon strategy, rapid and efficient implementation of EU rules and more investment in education and research.”
Abruzzini added that Europe’s regions would play a serious role in developing EU strategies.
“Our survey shows strong disparities between regions in different countries, especially the big member states such as France, Germany and Spain.”
“The impact on business is not seen purely at the national level, but differs between regions.”
“This is why we welcome moves by regions within Europe to work together, to show the political will to get things done that is sometimes lacking at the national level.”
The full Eurochambres survey can be found here.
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