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Barroso Sees ‘Strong, Credible’ Euro as Region Exits Recession

European Commission President Jose Barroso said that the euro area’s economy is recovering despite record unemployment and that the euro is strengthening.

The “doomsday scenario against the euro” didn’t materialize and the shared currency is strengthening after the region emerged from its longest-ever recession earlier this year, Barroso said in a Bloomberg Television interview with Sara Eisen that will air today. The commission is “pursuing a very offensive trade agenda” to help jump-start exports, he said.

“The euro will be seen as a strong, credible and stable currency and the European economy is stable enough to overcome this crisis,” Barroso said in remarks taped yesterday at Bloomberg headquarters in New York. “There is now a much better outlook. Recovery is showing its first signs, but there is still a long way to go to say that we have the crisis behind us.”

The euro area’s economy emerged from a record-long recession in the second quarter amid the first sustained period of financial-market calm since the start of the debt crisis. The euro region economy grew 0.3 percent in the second quarter, the European Union’s statistics office said Sept. 4. Euro-area unemployment remains at a record 12.1 percent.

“The crisis is not yet over,” Barroso said. “We are, yes, technically out of recession but we are still at very high levels of unemployment.”

The euro advanced versus the dollar yesterday. The shared currency rose 0.4 percent to $1.3526 per dollar at 5 p.m. New York time. The euro has gained 5.7 percent this year, the most among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes.

New Confidence

The derivatives market is showing more confidence in the euro area as the premium traders pay to exchange euro-denominated loans for dollar funding for one-year drops to the lowest since before the 2008 collapse of Lehman Brothers Holdings Inc.

Barroso said the U.K. will remain in the European Union. “A referendum is also always a risk,” he said of the U.K. “If there is a referendum, we have to face it seriously.”

He declined to say whether he would seek or serve a third term. “I’m not going to speak about myself,” he said. “But frankly I believe two terms is already a lot.”

To contact the reporters on this story: Jeff Kearns in Washington at jkearns3@bloomberg.net; Sara Eisen in New York at seisen2@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net

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