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EU president says EU recovery, euro strong

EU president says EU recovery, euro strong

May 18th, 2011 by ELAINE KURTENBACH, AP Business Writer in News

SHANGHAI (AP) - The European Union's economic recovery is gaining momentum and the euro remains a strong, well trusted currency despite debt and deficit crises, the president of the 27-member block said Wednesday.

Herman Van Rompuy said in a speech in Shanghai that European businesses nonetheless need to improve their competitiveness if they are to preserve their prosperity.

Although Europe is still muddling through bailouts of Greece and Ireland and working out arrangements to stabilize Portugal, the economies account for only 7 percent of the GDP of the world's largest combined economy, Van Rompuy said.

"The economic recovery in Europe is on track and even gaining momentum. Our economic fundamentals remain strong," he said.

While European growth rates may appear "modest" compared to China's near 10 percent pace, they reflect the maturity and prosperity of the region's economies.

"It is really not bad at all," he said.

Regardless of the challenges all governments face in bringing their deficits and debts under control, the euro remains a "very strong currency trusted by investors worldwide," Van Rompuy said. "Europe has become a haven of stability and peace."

During an earlier stop in Beijing and now in Shanghai, Van Rompuy has been urging China to do more to make its economy a level playing field for foreign business, especially in the area of government procurement.

The European public could turn to protectionism if they feel China is not playing fair.

The 27-nation EU is China's largest export market, but European firms have been battered by low-cost Chinese textiles, leatherwear and other goods. Meanwhile, European companies, along with other foreign firms, have complained of regulatory barriers hindering their ability to compete freely in China. Beijing's currency controls, which help boost Chinese exports, are also an irritant in relations with other countries.

In Beijing, Van Rompuy met with Chinese Premier Wen Jiabao for talks on topics ranging from trade to human rights and copyright protection. They also reviewed preparations for a 14th EU-China summit scheduled for the second half of the year. Van Rompuy met with Chinese President Hu Jintao on Monday.