Press Release: Euro area expansion stays robust

The euro area started 2007 on a healthy footing, finds the Quarterly Report on the Euro Area published on 3 July 2007. Economic growth in the first quarter reached 3% in annualised terms spurred by domestic demand, particularly investment. Consumption contracted slightly but is expected to recover quickly as consumer confidence approaches an all-time high. Export growth decelerated, but this reflects mainly statistical effects and, possibly, a cooling off of the international environment rather than the appreciation of the euro. The focus section of the report shows that financial integration clearly has positive effects on economic growth and is also important for the smooth functioning of EMU. Therefore, euro-area Member States have even more to gain from financial integration than other EU Member States.