WASHINGTON. Oc t 9: The EU has found itself on the front line of efforts to avert a global recession because of its relatively strong growth and the arrival of the euro single currency. reports AFP.

The European Union let the United States take the lead in efforts to battle the crisis in Asia when Its first erupted 15 months ago. focused as it was on putting in place conditions for a successful launch of the euro in January.

But the EU came back to the front of stage during meetings of international financial leaders at the International Monetary Fund and World Bank annual meetings which ended on Thursday.

France produced a 12-point proposal for ways to improve the global financial rulebook which it put to its EU partners ahead of the Washington talks, so that Europe could speak with a strong single voice here.

The move met with some success, with the United States agreeing to the idea of better-regulated capital flows, an idea they fiercely opposed up to a few months ago.

Some of the ideas are also included in reform proposals to be studied the IMF. including International Monetary Fund Managing Director Michel Camdessus' call for the IMF policy-making interim committee

to be transformed into a decision-making body, which has been strongly backed by France.

But key industrial countries France and Germany have so far not yielded to pressure to lower their interest rates in a bid to boost growth at home and improve the global economic environment.

For the moment. Bundesbank President Hans Tietmeyer is stressing that if all 11 euro zone countries along their interest rates at the current French and German level of 3.30 per cent for the euro launch, that would be equivalent to an average cut of 0.50 percentage points.

This would be double the 0.25 percentage point cut announced by the US Federal Reserve last week, which failed to boost markets disappointed that the reduction was not larger-

The euro zone is expected to lie a key engine of growth for the world economy in the immedi ate future, with the IMF forecasting three per cent growth this year and 2.8 in 1999. compared with world economic growth of two per cent this year and 2.5 in 1999.

But the IMF has warned that if the euro is to achieve its potential member countries must prove that they can maintain closely coordinate economic and budget policies.