EU sees no need to follow US rate cut

European finance ministers have distanced themselves from the United States' economic problems, saying Europe does not need to emulate a deep rate cut to avoid recession because it has strong fundamentals.

The U.S. Federal Reserve earlier today slashed its benchmark interest rates by 75 basis points in a bid to alleviate fears of a recession in the world's biggest economy.

The surprise move reversed earlier steep losses in European stocks, with Britain's FTSE 100 closing up 2.9 percent and the FTSEurofirst 300 also ending higher.

"We don't need to imitate all the decisions other economies can adopt. We need to rely on our own framework that is much more efficient," Economic and Monetary Affairs Commissioner Joaquin Almunia said at the European Parliament.

"The U.S. economy has serious problems with fundamentals. We haven't," he added. He also said he did not expect a recession in the United States but rather a pronounced slowdown and that the Fed move had not altered his view.

His comments helped boost the euro by more than half a cent against the dollar to $1.4643.

Italian Economy Minister Tommaso Padoa-Schioppa was reticent about the impact of the deeper-than-expected Fed cut. "I don't think the events of the last 24 hours change fundamentally the assessment ... that a correction is under way, a correction to important imbalances," he said.

Fears of a U.S. recession yesterday sparked a share rout that generated the biggest one-day drop since the attacks of Sept. 11, 2001.

The chairman of the euro zone finance ministers, Luxembourg Prime Minister Jean-Claude Juncker, said the sell-off was partly irrational, while Spanish Economy Minister Pedro Solbes said everyone was concerned by the direction of markets.

"When financial markets act irrationally, and are driven by herd behaviour, when stock markets demonstrate short-termism, there is no reason for finance ministers to do the same," Juncker told reporters on arriving for talks.

Other EU ministers sought to play down the impact on Europe.

"Even if the United States goes into recession ... it's not a tragedy in itself," French Economy Minister Christine Lagarde said. She urged calm despite what she called a brutal correction in markets, with Asian shares having skidded lower this morning.

Lagarde got backup from Berlin, where Chancellor Angela Merkel said Europe's economy was an "anchor of stability in the world" and added in an interview on German TV: "There are no signs of a recession in Germany and that's also the case for Europe." A

Almunia called for a sense of perspective. "It's not about global recession," he said. "It's about a risk of a U.S. recession, which has created this situation on the markets. We are well prepared to weather this situation even if we cannot ignore the risks of our growth rates being affected by this turmoil." While a U.S. recession could not be ruled out, ministers said its potential impact on Europe would be smaller than in the past.

"The economic situation in the U.S. is in no way comparable with that in Europe or the euro zone," Juncker said.

"We feel comfortable with our economic situation at the moment. The economic situation in Europe seems to be uncoupled from the situation in the U.S." European Central Bank President Jean-Claude Trichet and International Monetary Fund boss Dominique Strauss-Kahn did not comment.

U.S. President George W. Bush called on Friday for a package of tax cuts and other fast-acting measures worth perhaps as much as $140-150 billion to rescue an economy hit hard by a housing slump, mortgage default crisis and a global credit crunch.