Euro zone economy broadly stabilised - Juncker

The euro zone economy has steadied after the plunge of the global economic crisis, the chairman of the euro group of nations, Jean-Claude Juncker, said today.

Juncker, who chairs the group of euro zone finance ministers, said the economy has 'broadly stabilised', suggesting that the worst of the crisis was over.

'The situation has broadly stabilised' and we can express 'moderate optimism for the second semester', he told members of the European parliament in Brussels today.

But he warned that the 'situation remains fragile and flaky' and that an economic upturn could be very limited in Europe, with a long period of weak growth unlikely to provide nations with much budgetary room for manoeuvre.

Juncker, who is also premier of Luxembourg, warned that the growth potential of the euro zone - the maximum possible growth without sparking excessive inflation - 'is going to seriously decelerate'.

Euro zone business confidence firms

European business and consumer confidence firmed in September for the sixth month in a row, an EU survey showed today, building on recent encouraging news for Europe's struggling economies.

The European Commission's economic sentiment indicator for euro zone rose to 82.8 points in September from a revised 80.8 in August, continuing a climb away from a record low 64.6 points in March. However, the rise remains below long-term averages and was the smallest recorded over the last six months.

In the 27-nation EU, the indicator rose to 82.6 points from a revised 81.0 points in August.

Among the biggest EU nations, France and the Netherlands saw the biggest rises, up 4.7 and 4.6 points respectively, while Germany posted a moderate increase of 1.5 points. Sentiment worsened in Italy and Spain.

The survey also noted that confidence in financial services - which is not taken into account when calculating the indicator - bounced back strongly by 13 points in the euro zone, showing an improved assessment of the business sector.

The commission's separate business climate indicator also improved in September in the euro zone, although not as much as the previous month.