ECB chief says eurozoneeconomy will strengthen

22nd September 2004, Comments 0 comments

22 September 2004 , BRUSSELS - European Central Bank President Jean-Claude Trichet predicted a "stronger upswing" in eurozone growth in 2005 but warned Wednesday against moves to undermine the currency bloc's stability pact. The ECB chief cautioned that rising oil prices and "economic imbalances" in some parts of the world continued to cast a shadow over eurozone growth. "Economic recovery in the euro area has maintained its momentum," Trichet told the economic affairs committee of the European Parliament.

22 September 2004

BRUSSELS - European Central Bank President Jean-Claude Trichet predicted a "stronger upswing" in eurozone growth in 2005 but warned Wednesday against moves to undermine the currency bloc's stability pact.

The ECB chief cautioned that rising oil prices and "economic imbalances" in some parts of the world continued to cast a shadow over eurozone growth.

"Economic recovery in the euro area has maintained its momentum," Trichet told the economic affairs committee of the European Parliament.

The current gradual recovery would turn into a "somewhat stronger upswing in the course of 2005," Trichet said.

Growth of eurozone gross domestic product (GDP) will recover from 0.4 percent in 2003 to between 1.6 percent and 2.2 percent in 2004, rising to 1.8 percent and 2.8 percent in 2005, he said.

Government efforts to consolidate public finances and keep budget deficits under the stability pact's threshold of 3 per cent of GDP would reinforce confidence in the overall economic outlook, Trichet added.

"The economic recovery would be stronger and more sustained if ambitious, well-designed structural reforms were to be implemented," he said.

Governments must keep their reforms agenda in tact despite political difficulties, Trichet underlined.

The ECB chief warned governments against seeking to change the stability pact's tough line on budget deficits.

"Proposals that could allow for a loosening of the excessive deficit procedure such as suggestions put forward with regard to the definition of exceptional circumstances and the time frame for correction ... are not contributing to the solidity and soundness of European Monetary Union," Trichet warned.

The European Commission, seeking to ease tensions with France and Germany which remain in breach of the pact's budget deficit regulations, has called for more flexibility in applying the 3 per cent rule.

But Trichet insisted that "there was no need" for changes in the text of the treaty.

DPA

Subject: German news  
 

0 Comments To This Article