ECSC financial report 1998

Abstract

The buoyant econom1c recovery in the European Union, already observed in 1 997, was able to withstand the worsening international environment and restore the optimism of industrialists and consumers. Thus the gross domestic product (GOP) of the EU increased at a rate of 2.9% in 1998, a very slight improvement of 0.1 %compared with the forecasts. This growth was supported by domestic demand, which took over from exports and thus made up for the declining external contribution, which became negative owing to the worsening international economic situation, the impact of the crisis in South-East Asia being partly offset by lower interest rates and the fall in the prices of raw materials. These compensatory factors were. to some extent the result of events in that part of the world. The underlying domestic situation thus remained sound: good supply situation, improvement in the return on investment, and interest rates and Inflation at historically low levels. The prospect of the introduction of the euro at the beginning of 1 999 was an additional stability factor.