German Finance Minister Wolfgang Schaeuble (left) with Italian counterpart Giulio Tremonti at the start of a Eurogroup finance meeting at the EU Council in Brussels yesterday.

BRUSSELS: European finance ministers said yesterday they saw only limited fallout from Dubai’s debt troubles but that it showed the global financial crisis had yet to end.

Ministers from the euro currency zone sounded cautiously confident about potential problems beyond the Gulf as financial markets recouped some of the losses incurred after Dubai World holding company said last week it could not pay its debts.

Swedish Finance Minister Anders Borg, arriving for talks in Brussels on reducing deficits and tightening financial regulation following recession in Europe, said European bank exposure appeared so far to be “reasonable”.

“So far I have not seen a serious risk coming from Dubai (for the euro zone),” Finnish Finance Minister Jyrki Katainen added before a regular meeting attended by European Central Bank chief Jean-Claude Trichet.

“But of course it is very worrying that there are still areas or countries like Dubai ... which can shape our economies. The atmosphere is still weak, and growth is not yet on a strong enough path.”

Global markets took a pounding when news broke last week that state-controlled Dubai World, which led the emirate’s transformation into a regional hub for finance, investment and tourism, was unable to pay its debt.

But yesterday, Asian, European and US stocks regained ground following the lead from Wall Street overnight as fears of contagion eased, despite further falls in stock prices in Dubai, Abu Dhabi and Qatar.

German Finance Minister Wolfgang Schaeuble told reporters on arrival for the talks in Brussels that Dubai’s difficulties showed the world was not yet through the crisis that began in 2007 when a global credit boom turned to bust.

“It shows the financial crisis is not over,” he said.

The blow-out sparked a recession across the industrialised world and beyond, including a tumble in house prices and the property boom that Dubai’s extravagant construction projects came to symbolise.

The primary business European ministers were expected to tackle in Brussels yesterday and today, when euro zone ministers are joined by colleagues from the rest of the European Union, was to further cement commitments to deep deficit reduction targets following the crisis.

In the third quarter of this year, the euro zone economy registered its first quarter of GDP growth since the first quarter of 2008. Ministers are seeking to reassure financial markets that they will make a serious attempt once the recovery is firmer to reduce deficits bloated by recession.

The European Commission, the EU executive, proposed deadlines on November 11 ranging from 2012 to early 2015 for 13 EU countries to bring budget gaps back below 3 percent of GDP.

It also said it would step up disciplinary budget action against Greece for not making an effort to cut its shortfall.

The Commission gave Germany, France, Spain, Austria, the Netherlands, the Czech Republic, Slovakia, Slovenia and Portugal until 2013 to bring their deficits below the 3 percent EU limit.

The euro zone’s biggest economy Germany has long said it would meet its 2013 deadline, but France had been reluctant to accept its target, saying 2014 would already be a good effort.

French Economy Minister Christine Lagarde said in Berlin on Monday after talks with German colleague Schaeuble that Paris would aim for 2013 if economic conditions permitted, a shift in tone towards the deadline the Commission wants.

The Commission expects the aggregate budget deficit in the euro zone to jump to 6.4 percent this year and 6.9 percent next year from 2.0 percent in 2008 — more than twice the EU limit of 3 percent of gross domestic product.

This will boost euro zone debt to 78.2 percent of GDP this year, 84 percent in 2010 and 88.2 percent in 2011 in a trend that could undermine the value of the shared euro currency.