EU officials seem special of the durability of the recovery and doubt that powerful reflection policies in the United States are the right way to go, despite third quarter GDP there having surged at a blistering 7.2 per cent annual rate.

"There is a view in Europe that all the United States is doing is postponing the day of reckoning by stimulating the private sector to take on more debt," said Tony Dolphin, economist with Henderson Global Investors in London.

But departing from the US and particularly the Federal Reserve's vision of the world implies a more anti-inflationary stance that could send the euro soaring, hitting euro zone manufacturers and stopping the recovery in its tracks.

"You can either toe the Fed line and only raise rates when there is tangible evidence of inflation. Or you can resist reflation, as the Bundesbank did in the 1980s, and accept currency appreciation," said Thomas Mayer, chief European economist at Deutsche Global Markets.

Hawks at Germany's central bank were accused by the US in the 1980s of seeking inflation under every rock and some blame this spat for contributing to the 1987 stock market crash.

The narrow 5-4 vote by the Bank of England to keep interest rates on hold this month signalled the issue of rising debt is already nagging the British, although their buoyant housing market may make it something of a separate case.

Inflation is a more distant threat in the euro zone, where over capacity and weak pricing power will keep the consumer price index slanting downwards well into 2005.

Instead of tub-thumping optimism, the European Commission was pointedly guarded in forecasts released this week which dwell on the risks confronting a gradual pick-up next year.

This contrasts with the dependable optimism of the White House and buoyant talk of five per cent growth ahead.

The Commission cited a resurgence of the euro on foreign exchange markets, 'macro-economic imbalances' and a setback in red-hot property markets like Spain, Ireland and the Netherlands as risks to its modest outlook for 1.8 per cent growth in 2004.