Eurozone to outpace American Economy for Second Year

As the U.S. teeters on the brink of a recession after the
end of a five-year housing boom, growth in the 15 nations that
share the euro is poised to outpace the American economy for a
second straight year.

The region's resilience lets Jean-Clause Trichet, who today presides
over the European Central Bank's monthly policy meeting, focus on
fighting inflation instead of cutting interest rates. Because
Europeans save more than Americans and splurge less on houses and
stocks, the continent is better placed to withstand the global
credit squeeze without the need for lower borrowing costs.

``To be thrifty is a good thing and definitely a plus for
the European economy in this tough period,'' said Jean-Michel
Six, chief European economist at Standard & Poor's in London.
``The attitude to debt and credit is clearly very different
between the U.S. and Europe.''

U.S. growth will slow to 1.5 percent this year from 2.2
percent in 2007, according to the International Monetary Fund.
The Washington-based fund forecasts the euro-area economy will
expand 1.6 percent after 2.6 percent last year.

While that has pushed the euro to a record against the
dollar, German companies have compensated by improving efficiency
and reducing labor costs. Adidas AG, the world's second-largest
sporting-goods maker, reported a 63 percent jump in fourth-
quarter profit yesterday, and sports-car maker Porsche SE said
March 4 that first-half profit rose 44 percent.

`Best Performance'

``We are seeing the best performance in years despite the
exchange rates,'' ECB council member Nout Wellink said on Feb.
27. The euro has risen 16 percent against the dollar in the past
year, reaching $1.53 for the first time yesterday.

Growth in Europe's service industries accelerated in
February, unemployment fell to the lowest since records began in
1993 and business confidence in Germany, the region's largest
economy, unexpectedly rose for a second month.

The economy's performance will allow the ECB to keep its
benchmark rate at a six-year high of 4 percent today, said all 54
economists surveyed by Bloomberg News. The ECB announces its
decision at 1:45 p.m. in Frankfurt and Trichet, 65, briefs
reporters 45 minutes later. Inflation is running at 3.2 percent,
the fastest since the euro's debut in 1999.