This was mainly due to effects of the Asian and Russian crises, and to the impact of the turbulence in Latin America. As the external environment has remained unfavourable, EU exports have slowed sharply and business confidence has deteriorated. There are no inflationary pressures and interest rates are at record low levels. This is strong evidence of the quality of the euro. Budgetary positions are much improved and are due to be close to equilibrium at the end of 2002.
Consumer confidence is high.
As a result, employment is rising and purchasing power is increasing. Europe finally has turned around the trend in unemployment. International financial markets seem to have stabilised. The worst appears to be over in some of the economies in Southeast Asia affected by the crisis. And also in Japan some positive signs are emerging.