UK urges faster growth in Euro zone

LUXEMBOURG - The euro zone economy needs to grow faster, British finance minister Gordon Brown has said.

Economists have warned that slow growth in the euro zone countries, a key export market for British firms, could hit UK economic growth this year and Brown agreed faster economic expansion in the bloc was needed.

"I want to see the European economy grow faster. There is no doubt that all of us benefit from the euro area growing faster than it is at the moment," Brown told reporters during a meeting of European Union finance ministers in Luxembourg.

On the euro, Brown said: "I do believe that we made the right decision for Britain that at this time the five tests that we have set have not been met."

Britain has long said it is in principle in favour of adopting the single currency as long as five economic conditions are met and then subject to approval in a referendum.

The tests measure whether there is sufficient convergence between the British and euro zone economies, whether there is enough flexibility to cope with shocks and what effect joining would have on investment, financial services and jobs.

The euro has suffered in recent days from market concern about euro zone's ability to boost its feeble growth rate after French and Dutch voters rejected a draft EU charter last week, partly for fear it would open the way to more free market policies.

At their first meeting since those "No" votes, European finance ministers in Luxembourg stepped up efforts to end a row over the EU's long-term budget.

A major sticking point in discussions is Britain's refusal to give up its cherished rebate from EU coffers. Brown said his position was unchanged from a similar meeting in May when UK officials said the refund was not up for negotiation.

"Our position is unchanged," Brown said. "It's exactly what it was a month ago. There will be no change in our position."

The rebate, worth some €4.6 billion ($8.09 billion) annually, was won in 1984 by then British Prime Minister Margaret Thatcher. It is enshrined in EU regulations and would require unanimity to abolish or modify.

- REUTERS