EU Juncker Sees No Risk of Recession In Euro-Zone

BRUSSELS (AFP)--Luxembourg premier and Finance Minister Jean-Claude Juncker said Monday he did not see a risk of recession in the 15-nation Euro-zone bloc after the economies of countries that share the euro contracted in the second quarter.

"I don't see a risk of a real recession in Europe," Juncker told journalists at an E.U. summit in Brussels on the Georgian crisis.

The euro-zone economy contracted in the second quarter for the first time since the bloc was formed in 1999, raising concerns it is headed for a recession.
The economic prospects for the euro-zone economy dim. The euro has steadily lost ground against the dollar since hitting an all-time high over $1.60 in July.

Juncker welcomed the euro's move lower against the dollar, saying that "things are developing in the right direction," although he said the U.S. currency still had room to strengthen further.

"We do think that a strong dollar is in the interest of the global economy and ... we still do think that the euro is over-evaluated in comparison with the U.S. dollar," he said.

The dollar's strength has been a source of concern for euro-zone finance ministers, whose regular meetings Juncker chairs, because it makes exports from the bloc more expensive on international markets.