G7 FINANCE: GROWTH PROSPECTS IN EURO ZONE REMAIN FAVOURABLE.

Questioned regarding possible pressure on the ECB to follow the example of the United States Federal Reserve and cut rates, Wim Duisenberg insisted there is no dissatisfaction on either side of the Atlantic or Pacific regarding the ECB's monetary policy as currently being conducted. He added however, that the ECB will remain vigilant, particularly until such time as inflation in the Euro zone returns below the 2% threshold, the Central Bank's official target. Emphasising his optimism regarding the capacity of the Euro zone to register growth of 3% in 2001 and 2002, Mr Duisenberg affirmed that growth in the Euro zone remains relatively robust, leaving the area well placed to deal with the slowdown in the American economy.The ECB President also highlighted the fact that in its final statement the G7 had returned to the terms it used in the Spring of last year regarding the situation on foreign exchange markets, foregoing the terminology used in September. The single currency was at that time particularly weak, a fact that resulted in concerted intervention by leading Central Banks. In the final communique from Palermo, the G7 merely reaffirms that members have again agreed that exchange rates between leading currencies should reflect economic fundamentals. The group indicates that it will continue to closely monitor future evolutions and co-operate appropriately on exchange markets. In their declaration on 22 September...