The Organisation for Economic Cooperation and Development (OECD) says Europe and Japan are leading the world in economic growth this year overtaking the US. In the OECD's twice-yearly report on international economic prospects, chief economist Jean-Philippe Cotis said: "The current economic situation is in many ways better than what we have experienced for years." The organisation's latest forecast is for growth of 2.7% this year for the euro zone going down to 2.3% next year. Just 2.1% for the US this year, rising to 2.5% in 2008 and in Japan 2.4% this year followed by 2.1% in 2008. The OECD said the world economy is weathering the US slowdown helped by the booms in China and India. The slump in the US real estate market has, they believe, been arrested, but they warn it could still be an effect on financial markets and consumer spending. It said that the US economic slowdown should help lower inflation there so the Federal Reserve can reduce the cost of borrowing next year. The European Central Bank should raise its interest rates "a bit further'' the OECD thinks, putting them up twice more this year by a quarter point. Germany's expansion, the report says, has been "particularly vigorous'', with Italy rebounding "more than expected". Domestic demand is now the major driver of growth, helped by reduced unemployment.

Eurozone growth set to rise, says EU

The European Commission reports that prospects for economic growth in Europe look better than had been previously estimated. They now anticipate GDP growth of 2.4%, which is up by 0.3% on the forecast but remaining below the 2006 level of 2.7% although inflation should be lower at 1.8% against 2.1% in 2006. Germany and Spain rank highly as rapidly growing economies, while the French and Italians are described as "experiencing sluggish growth". It is expected there will be a rise in interest rates within the eurozone from the current level of 3.5%

New offensive on flexible working The European Trade

Union Confederation (ETUC) ended its annual congress in the historic and sunny city of Seville by serving notice of a fresh offensive on flexible working in the EU. Some 81 unions from 36 European countries representing 60 million workers were represented at the congress The gathering of Europe's principal trade union organisation closed with a vow to put pressure on European authorities in a thrust toward more flexible work rules. Secretary General John Monks, who was re-elected at the Seville congress, urged unions to "take the offensive" as the ETUC has found it increasingly difficult to have their issues taken up on the European level. Monks also called for protests in Brussels during a June summit of European leaders to campaign for workers' protections to be included in any new EU constitution. An official statement ETUC said it would resist an EU constitution that does not include a fundamental rights charter providing for a right to strike and negotiate, among things. "We will campaign against any moves aimed at omitting it or relegating its importance," the statement said. European Commission President Jose Manuel Barroso addressed trade unionists during the four-day conference, referring to the need to "adapt" Europe's social model. "We have to adapt, we have to reform, but we can also adapt keeping the value that makes Europe such an important achievement," he said. Monks regretted that Barroso "had not offered hope" to European workers. Wanja Lundby-Wedin of Sweden, the first woman to be elected the organisation's president said that to reach its goals, ETUC must first gain "respect" from European authorities.