The European Banking Federation said today that it expects average euro zone growth of 1.7 per cent in 2004 and that the euro's exchange rate was not yet a concern.
"The European economy is picking up, but the recovery is fragile," it said as it released its poll of the views of its 21 economists based in European Union member states. It said the concerns that the euro's appreciation would harm the economy of the 12-member euro zone bloc were "exaggerated".
"Only if the US dollar were to weaken dramatically against the euro, say to $1.50, would we have reason to worry about the international competitiveness of our industry," it said.
The poll also said that euro zone interest rates had found their floor and were likely to remain on hold at least for the first half of next year.