Lagarde plays down sharp stock sell-off

A SHARP sell-off on European stock markets on Friday took place amid thin trading volumes and was not a huge concern, French Economy Minister Christine Lagarde said in an interview with France Soir newspaper released yesterday.

“What happened on Friday should not be overestimated.” she was quoted as saying, adding that the falls came partly in response to vast gains earlier in the week after EU members agreed to a huge rescue package to stabilise the euro.

“What we saw on Friday was what they call in the bourse a ‘consolidation’,” she said.

European shares closed 3.4 per cent lower on Friday, hit by growing concerns that tough EU austerity measures would slow growth in the region, with France’s CAC 40 index dropping 4.6 per cent.

Lagarde stressed that the euro was not in danger.

“Everyone is on board and all 16 (countries) want to defend their currency. It is our common good,” she said.

Lagarde added that the recent market fluctuations showed that European nations had to move quickly to construct the necessary framework for emergency EU funding.