Breakfast with Junker

Luxembourg Prime Minister Jean-Claude Junker chairs the "Eurogroup" of Finance Ministers of the Eurozone countries. Breakfast with him this morning with him and others was particularly timely given yesterday's turmoil on financial markets.

When asked whether he thought yesterday's turmoil in the USA could cause similar financial sector bankruptcies in Europe, he paused, and said: "If I were to say 'Yes', you can imagine what the media would report and the effect this would have on the markets. If I were to say 'No', you can imagine what the media might say about me in a couple of weeks"

Actually, he was reasonably upbeat on the chances of avoiding a recession in the Eurozone (a "technical" recession of two consecutive quarters without growth was possible, but worse unlikely) and he drew attention to the advantage of the euro itself in such turbulent times: had there still been separate currencies buffeted in different directions,the extra instability would have added to the crisis.

Not that everything is perfect. He said that some countries are likely to overshoot the three percent guideline on government deficits, as they hadn't consolidated their public finance during the good times. (He did not mention France by name, but said he was glad to answer that question in French, as he effortlessly switched around from one language to another).

But, he said, the crisis had shown that the market was not the solution to everything. Good management and intervention by governments is patently needed too, as even the Americans are discovering. Market fundamentalists would do well to observe a period of silence. As a Prime Minister, he was pleased that his job was no longer considered to be be illegal.

Mr Junker, let us recall, is not a left-wing Socialist, but a Christian Democrat.