Eurozone growth unlikely to reach pre-crisis levels: ECB

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The eurozone economy is unlikely to enjoy the same levels of growth it experienced before the global financial crisis, the chief economist of the European Central Bank said on Tuesday.

Speaking at the Euro Finance Week in Frankfurt, Juergen Stark confirmed that the ECB would next year continue unwinding exceptional support measures designed to support the shaky eurozone banking system and wider economy.

"In my view, pre-crisis growth paths are unlikely to be reached again," said Stark, adding: "We are likely to experience more volatility in macroeconomic variables than in the pre-crisis period."

Stark said the situation in the financial markets recently had "improved significantly ... notwithstanding the most recent tensions in some segments of the European sovereign debt market."

"The phasing out of our liquidity support measures will continue after the end of the current quarter," the economist said.

The ECB has provided eurozone commercial banks with unlimited cash loans to ensure liquidity in the money markets and ease a credit crunch that spread to the broader economy.

© 2010 AFP

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