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EU: Mixed Feelings About Slow Economic Growth

European Union officials have expressed mixed feelings about recent data showing slow growth in the economy of the 12-nations that use the euro currency.

The talks come after the EU's statistics agency, Eurostat, this week reported a small half-percent increase in the euro zone economy in the first quarter of this year. A surge in German exports led the euro zone, compensating for a negative figures in Italy, the Netherlands and Finland, while the Belgian economy stalled. Italy's economic growth rate decreased by a half point in the first quarter of this year, the worst result since the end of 1998, and the second quarter in a row with negative figures.

Luxembourg Prime Minister Jean Claude Juncker, whose country holds the rotating EU presidency, took a mixed view of the figures.

Jean Claude Juncker
"Some features allow for a certain amount of optimism," said Jean Claude Juncker. "The latest figures on the first quarter growth in Germany, [and] there is some bad news. Outside the zone oil prices continue to give cause for concern. In some countries consumer and investors confidence is stable or up. In others it is moving in the wrong direction."

Although Germany reported growth driven by exports, consumer confidence and spending was weak. Economist say consumer spending is important to the European economy. Exports cannot sustain growth because the high euro makes them expensive on world markets. The euro remains relatively strong against the dollar, trading around $1.26, although it is about 10 cents off its record high.

Economists are also concerned that if oil prices remain high, around $50 per barrel or more, the slow period in the European economy could worsen into a general downturn. The European Commission had already cut its growth forecast for the euro zone this year to 1.6 percent, down from an earlier estimate of two percent.

Meanwhile, EU officials also announced that one side of the euro coins would be redesigned to reflect the growing EU, which expanded to 25 nations last year.