Peter Jackson column

May 11 2006 By Peter Jackson, The Journal

There is some good news for Gordon Brown, and I'm not referring to the terrible time his next door neighbour's having.

No, I refer to the good news from the other side of the Channel, where the European Commission has upped its economic growth forecast for this year from 1.9% to 2.1%.

Although we like to maintain a rivalry with our European friends, the truth is that what is good, in economic terms, for them, is also good for us and, therefore, for Gordon.

A not insignificant element of this growth will be contributed by Germany, which only a couple of years ago was seen as the sick man of Europe, particularly after an indecisive election result which seemed to indicate that the Germans had no stomach for economic reform.

It would seem, however, that reform has been quietly underway with workers having to adopt flexible working practices. The result has been a February trade surplus of 13m euros.

The French, it is true, are contributing little to this European revival, having delivered a resounding `non' to the very idea of reform, but there is every chance they will have to change their minds once Chirac slithers off the stage next year.

There is still the ongoing oil crisis and eye-watering prices casting a pall of gloom over a world economy which is still very dependent on the stuff.

But it could be argued that here the bad news has already been discounted and that it only takes one factor among all the factors conspiring to drive oil prices up to change and prices will tumble.

For instance, the Iraqis must soon announce the formation of a government of national unity, Iran's President Ahmadinejad could be displaying a willingness to negotiate by sending his letter to President Bush, Nigeria's oil producing Delta State could be pacified and maybe President Chavez of Venezuela will see sense.

Okay, some of these may be long shots, but my point is that just about everything bad that could have happened to oil has happened to oil and now there's a chance of at least some good news.

And, if you couple that to the underlying strengths revealed by the EU figures, then Gordon really does have reasons to be cheerful.