FRANKFURT, March 16, 2008 (AFP) – The dollar’s plunge has made the eurozone the world’s biggest economy by one measure and has underscored shifts that are reorienting the 15-nation bloc towards Asia, Russia and oil-rich Gulf states, analysts say. “With the euro now trading around 1.56 against the dollar, the size of its annual output (at market value) has exceeded that of the United States,” US investment bank Goldman Sachs estimated last week.
“Brief as the development may prove to be, European policy makers will no doubt derive some pride” from the event, it said.
The single European currency has skipped from record to record amid fears the US economy is heading into recession at a time of national housing and financial crises.
Interest rates have been cut in the United States to spur business activity, while the European Central Bank (ECB) has kept lending rates steady owing to concern over eurozone inflation that hit a record of 3.3 percent last month.
Meanwhile, the economy of 320 million people — which churns out 15 percent of global gross domestic product — has slowed but shown a degree of resiliency to the US slump that few would have counted on just a few years ago.
Historically thrifty German consumers helped