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German and EU officials speak up against panic

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12:11 CET+01:00
High level EU politicians have cautioned against panic after two days of turbulence on the financial markets. Jean-Claude Juncker, Prime Minister of Luxembourg and Euro group president said that while he is not ruling out the possibility of a recession in the US, he does not believe that the credit crisis will necessarily mean a slowdown for the Eurozone economy. He warned about exaggerated pessimism late Monday and said “In comparison to the US, the fundamental data in Europe is solid.”

Juncker said the financial turbulence will only have a limited impact on the European economy. He described the situation on the financial markets as characterized by “high volatility and high uncertainty.” However, he said that the results seen in the financial markets over the past two days should not be applied to the economy as a whole. “One must first filter out the irrational element,” he added. “Europe has done its homework until now.”

German Minister for Economics and Technology and member of the centre-right CSU party, Michael Glos, also warned of exaggerated panic in the wake of stock market losses. “Naturally there is cause to be nervous,” said Glos. He warned, however, that too much anxiety will lead to unnecessary collateral damage. “I don't see that we are approaching a rapid, drastic depression. Rather I see growth opportunities for the world economy,” said Glos, urging people to focus on economic data.

The DAX, an index of the top 30 German companies, sank 7.1% to 6790 points on Monday.

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