Almunia Has No `Clear Idea
European Union Commissioner for Economic and Monetary Affairs Joaquin Almunia said he has no “clear idea'' how long the financial-market turmoil will last.
This year “may be one of the hardest years we can remember,'' Almunia said today at a conference in Madrid. “We still don't have a clear idea of how long we'll be living in such a difficult situation.''
The euro-area economy contracted in the second quarter for the first time since monetary union began almost a decade ago, buffeted by record-setting gains in the euro and oil prices, while the yearlong credit squeeze has led in the past two weeks to the collapse of Lehman Brothers Holdings Inc. and the government takeover of Fannie Mae, Freddie Mac and American International Group Inc.
“The degree of optimism has reduced in past six months,'' Almunia said faxless payday loans. “Many thought we were at the beginning of the end of the financial tension.''
Almunia said the European Central Bank has a “clear awareness'' of the dangers inflation poses for the economy, though price growth probably peaked at 4 percent in June and July.
“Inflation in August has started to slow in the euro region,'' he said. “We can expect that this deceleration won't just continue, but will become more evident.''
And this “will help avoid errors of the past with second- round effects,'' Almunia said.