EU leaders, France in particular, have been keen recently to declare an economic downturn over. Apparently there policies are about to deliver a recovery in both growth and employment.
There is a reason to be sceptical about this. At the same time as setting out an ambitious economic growth policy the Euro zone finance ministers also accepted France's plans aimed at balancing the budget by 2004. Obviously if european countries agree that growth is going to be higher and therefore tax receipts higher with lower welfare spending the task of meeting this target becomes easier. Given the political importance of this to the Euro the timing of the growth announcement is astounding.
More importantly, this comes at a time when the Euro is appreciating against the Dollar. This in itself may slow down the European recovery and therefore this may prove to be the opposite of what the continental economy needs at the moment. For the UK economy, this whole debate between finance ministers is almost irrelevant and perhaps is best ignored for the time being. It does however highlight that whatever the economic tests for convergence say, the test of what is politically appropriate for UK economic management appears to be drifting away from its target for the time being.