Dutch minister upbeat

By Stewart Fleming

Date: 16/02/06

Gerrit Zalm, the Dutch finance minister, gave an upbeat assessment of the outlook for the European Union's economy this week (14 February), implicitly endorsing the increase in interest rates from 2.25% to 2.5% which the European Central Bank (ECB) is expected to announce early in March.

This time round, the expected increase has not drawn criticism from eurozone finance ministers, the Eurogroup, as happened before the ECB's decision to raise rates from 2% to 2.25% in December.

At a seminar in Brussels following meetings of the Eurogroup and the Ecofin Council, Zalm said: "Europe is really in a recovery phase." Leading indicators such as consumer and producer confidence surveys are pointing upwards, he said, dismissing as "an aberration" the weak fourth-quarter growth figures from Germany and France.

Speaking on the eve of the first testimony to Congress from Ben Bernanke, the new US Federal Reserve Board chairman, Zalm said that "most of my [finance ministry] colleagues are reporting that their budget outcomes are better than expected, especially on the revenue side", another indicator of stronger than anticipated growth.

The Netherlands has just revised up its growth forecasts for 2006 to 2.75% and to 3% for 2007.

Comments by Dutch Finance Minister, Gerrit Zalm, on what he sees as signs for economic recovery across the eurozone.