Chirac hopes for economic peace

"Interest rates are low and can continue to fall," President Jacques Chirac said on Wednesday in what is seen as a clear reference to eurozone rates.

The European Central Bank (ECB) cut its key interest rate to 2.5% in March but the economic troubles of the 12 single-currency countries have continued to mount.

The economies of Germany, Italy and the Netherlands all shrank in the first quarter.

Since the start of the year, the euro has also gained about 11% on the dollar, surging beyond its 1999 launch level to around $1.17.

The US central bank, the Federal Reserve, has cut interest rated to 1.25% to kick-start its economy while Treasury Secretary John Snow has softened his stance on the strong dollar policy.

Economic peace

Mr Chirac also called on the G8 leaders, meeting on 1-3 June in Evian, to put aside their differences over Iraq to kick-start the global economy.

"All the conditions have now come together for an economic rebound," Mr Chirac said.

"We must not miss this turning point."

The meeting will bring US President George W Bush and world leaders who opposed his war on Iraq together for the first time since the conflict.

"After difficult months, Evian is the occasion to show that nations can and want to get along, act together in the service of mankind by growing their economies," the French president said.

The G8 comprises the US, France, Britain, Germany, Italy, Japan, Canada and Russia.