EU ministers say no recession here

By Jan Strupczewski and Paul Carrel

BRUSSELS (Reuters) - European finance ministers voiced concern on Tuesday as stock markets spooked by recession fear bled for a second day with scant regard for assurances that Europe would weather a storm blowing from the United States.

The chairman of the euro zone finance ministers, Luxembourg Prime Minister Jean-Claude Juncker, said the sell-off was partly irrational, while Spanish Economy Minister Pedro Solbes said everyone was concerned by the direction of markets.

"When financial markets act irrationally, and are driven by herd behaviour, when stock markets demonstrate short-termism, there is no reason for finance ministers to do the same," Juncker told reporters on arriving for Tuesday's talks.

Other EU ministers sought to play down the impact on Europe.

"Even if the United States goes into recession ... it's not a tragedy in itself," French Economy Minister Christine Lagarde said.

The ministers were speaking before the U.S. Federal Reserve on Tuesday slashed its benchmark interest rates by 75 basis points. The surprise move reversed earlier losses in European stocks, with the FTSEurofirst 300 up 1.4 percent and Britain's FTSE 100 adding 0.74 percent.

Lagarde urged calm despite what she called a brutal correction in markets, with Asian shares having skidded lower. In Europe, Monday's share sell-off had generated the biggest one-day drop since the attacks of September 11, 2001.

Sixty percent of French exports went to the rest of the euro zone and just 8 percent to the United States, Lagarde said.