Euro zone growth risks lasting dent, ministers told

Mon Jul 6, 2009 10:23pm BST
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* Euro zone potential growth to fall below 1 pct - Juncker

* Low growth, high joblessness pose risks of social crisis

* Difficult exit from fiscal stimulus

* Inflation may reach ECB target in few months - Almunia

By Marcin Grajewski and Tamora Vidaillet

BRUSSELS, July 6 (Reuters) - Euro zone finance ministers discussed fears on Monday that the currency area's ability to grow economically would fall dramatically after the downturn, with high unemployment posing a threat of social crisis.

Eurogroup chief Jean-Claude Juncker said the 16-nation currency area's potential growth, or the highest expansion sustainable over time, could fall below 1.0 percent this and next year from 2.2 percent recorded before recession struck.

"There is a high probability that because of the crisis the euro area will suffer a potential permanent loss of future growth," Juncker told a news conference.  Continued...

 
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