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The BBC's Jenny Scott in Malmö
"Painful reforms are essential if Europe is to become the new engine of global growth"
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Saturday, 21 April, 2001, 17:46 GMT 18:46 UK
Brown 'optimistic' over slowdown
Gordon Brown greeted by Sweden's finance minister Bosse Ringholm
Mr Brown had to tread carefully with fellow EU ministers
Chancellor Gordon Brown has given an upbeat assessment of how the UK will cope with the global economic slowdown.

Speaking at an "informal" meeting of EU finance ministers and central bankers in the Swedish city of Malmö, Mr Brown said Britain was better placed than in previous years to withstand the current downturn.


We have got to be vigilant but at the same time I am cautiously optimistic

Gordon Brown
With the UK outside the single currency but dependent on the euro zone for growth Mr Brown had to tread carefully on the hot topic for fellow ministers - European interest rates and whether or not to lower them.

Early attempts to portray a united front on the issue collapsed as sharp differences of opinion emerged.

Wim Duisenberg, president of the European Central Bank (ECB), stuck to his message that European growth would be affected by the sharp slowdown in the United States but only slightly.

That reflects the ECB's decision to leave interest rates alone for now, despite Wednesday's unexpected rate cut by America's Federal Reserve.

Wim Duisenberg, ECB president
Wim Duisenberg: Man in the middle over European interest rates
Mr Duisenberg told reporters: "We are such a large autonomous economic area comprising a market of more than 300m people that the impact of developments outside the euro area on the euro area are not negligible but very limited."

And that message was echoed by Mr Brown when he spoke to the BBC about Britain's chances of weathering the economic squall.

"Obviously we have got to be vigilant but at the same time I am cautiously optimistic about the future.

"The monetary reforms we made with the Bank of England, our fiscal position and the strength of our public finances means that we are better placed than we have been in previous downturns to cope with what is happening in Britain and around the world."

Also at the talks were finance ministers from countries hoping to join the EU, the first time they have been invited to participate in such a gathering.

Outside the meeting hundreds of anti-globalisation protesters occupied the centre of Malmö and police made 50 arrests.

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See also:

20 Apr 01 | Business
EU debates economic slowdown
13 Apr 01 | Business
ECB president raps eurozone knuckles
11 Apr 01 | Business
Europe keeps interest rates steady
11 Apr 01 | Business
Pressure grows for European rate cut
02 Apr 01 | Business
IMF calls for euro rate cut
04 Apr 01 | Business
Germany's unemployment rises
29 Mar 01 | Business
Evidence of a European slowdown
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