The European Commission is more cautious

It would be well advised to triumphalism, but it is clear that the European economy is a real rally. According to figures released Monday by the statistical office Eurostat, the gross domestic product (GDP) of the euro area and the European Union (EU) to 25 increased by 0.9 in the second quarter, against, respectively, 0.6 and 0.7 in the first quarter.

This performance the best six years is all the more remarkable that the first two economies of the euro area, the Germany and the France, are among the most vigorous, with a national wealth rose by 0.9 for the first (against 0.7 in the first quarter) and more than 1.1 for the second (against 0.5). The Spain and the Netherlands were both held in the spring (0.9 and 1 respectively). Single flat: slight shortness of breath in Italy (0.5 against 0.7 in the first quarter).

The euro area has benefited from an increase in internal demand made possible by a sensitive decline in unemployment, a high level of business investment, the effect of construction and the success of exports.

The Commission remains cautious

The question is whether this improvement is temporary or lasting. Thierry Breton, French Minister of economy and finance, wants to see a heavy trend. He estimated France's "balanced" growth and judge that "2007 presents well, even very good." The European Commission is more cautious. It certainly noted yesterday, its growth forecast for the third quarter, which should, according to her, oscillate between 0.5 and 0.9 in the euro area, while she waited to 0.3 to 0.7 in July. But it has, however, revised downward its forecast for the fourth quarter (between 0.4 and 0.9, against a range of 0.5 to 1 in July). Above all, the Commission plans a more net decline for the first three months of 2007, with an increase of between 0.2 and 0.8 GDP.

The ECB may tighten the screws

Quotation marks, in fact, are many. The evolution of the oil price will depend to a large extent of the situation in several hot spots of the globe. Most analysts also fear a settlement of the internal application, next year, in Germany, where VAT will increase by three points on 1 January, or even a slowdown important in the global economy.

But they are mostly of very close monetary policy decided in Frankfurt. Before the strength of the economy, the European Central Bank (ECB), which provides for 2006 inflation of 2.3, higher than its long term objective, might continue to increase its interest rates. She wore, on 3 August, its main monetary milestone at 3, its highest level in three and a half years. It may well, by the end of the year, give one or two additional screws towers. Many analysts expect a level of 3.5 at the end of the year.

As, on the other hand, the US economy slowed strongly in the second quarter (0.6 versus 1.4 in the first quarter) and the Federal Reserve appears, du coup, wanting a pause in its policy of higher prices of rent of money on the day the day, the risk is great to see the euro to appreciate further against the dollar. That would undermine European exports. Thierry Breton said that Finance Ministers of the euro area remain very attentive to that "European policy did not hamper growth."