VALENCIA, Spain, Oct 26 (Reuters) - Europe should avoid falling into recession despite slower growth in the United States, said European Economic and Monetary Affairs Commissioner Joaquin Almunia on Friday.
But the world economy required international exchange rates to reflect reality, said Almunia.
Western countries have called on economies including China to make their exchange rates more flexible, in order to avoid currencies such as the euro taking all the brunt of weakness in the U.S. dollar.
“I’m not very pessimistic. There is a certain slowing down going on in the United States and a less pronounced slowdown in Europe. I don’t think we’re going to go in recession,” he said.
“Interest rates should reflect economic fundamentals and we need to avoid excessive volatility in exchange rates. The people who have to take some measures are the countries whose exchange rates do not reflect fundamentals,” he said.