Press Release: Robust growth helps euro area weather high oil prices

The euro-area economy is growing at one of the most robust paces since the beginning of the decade creating an environment potentially capable of weathering the negative effects of high oil prices, recent stock market turbulence and the appreciation of the euro. These are some of the key findings of the Quarterly Report on the Euro Area published 30 June 2006. The report also presents a mid-year review of budgetary policies in the euro area, and finds that, although significant progress was made in 2005, prospects for fiscal consolidation in 2006 appear meagre. Member States should make use of benign growth conditions to step up budgetary consolidation with rigorous budgetary implementation in 2006 and ambitious 2007 targets. The focus section looks at the growing importance of services and concludes that they have the potential to boost both productivity and employment in the euro area provided that adequate policies are put in place that foster competition and allow service providers to innovate, restructure and make full use of the current information and communications technologies (ICT).