EU warns of US recession as stocks dive

BRUSSELS, Jan 21, 2008 (AFP) – Top European finance officials sounded the alarm on Monday about a possible US recession as fears about the health of the world’s biggest economy plunged global stocks deep into the red.

“The situation is continuing to deteriorate in the United States,” Luxembourg Finance Minister Jean-Claude Juncker said after chairing a meeting with counterparts from the 15 countries sharing the euro.

“In recent months, we have always ruled out a recession in the United States, but we cannot totally rule it out today,” added Juncker, who is both Luxembourg’s prime and finance minister.

Global stock markets registered sharp losses as US President George W. Bush’s tax plans to revive the world’s largest economy failed to convince investors.

“We are all concerned. We are following the events on a daily basis, we hope things will not be as bad as they may look,” said Slovenian Finance Minister Andrej Bajuk, whose country holds the rotating EU presidency.

Despite mounting concern about the US economy, Juncker stressed: “We feel comfortable with our economic situation at the moment and we feel that consumers do not have a reason to lose confidence.”

“It would be a mistake to fal