Recovery ahead
September 3, 2009
Speaking at the headquarters of the ECB in Frankfurt, Trichet said the period of contraction for the 16 eurozone economies had come to an end.
The overall eurozone economy shrank only 0.1 percent in the second quarter, after it dropped 2.5 percent from January to March.
ECB staff also upgraded their projections for this year, saying they expected GDP to fall by 4.1 percent in 2009, a decidedly smaller contraction than the bank had previously predicted.
"There are increasing signs that economic activity in the euro area and elsewhere is stabilizing," This is consistent with the expectation that the significant contraction in economic activity has come to an end and is now followed by a period of stabilization and very gradual recovery."
Trichet stressed at the same time, however, that it was too early to end the exceptional ECB measures currently in place to boost the economy. He warning that it was too early at this point to withdraw support, even as some of Europe's economies, like Germany and France, emerge from the recession.
Interest rates to hold
Asked about how long the ECB would continue with its ultra-loose policies, he told reporters at a news conference: "Today is no time to exit. It is more of a bumpy road ahead. Uncertainty is high. Prudence and caution are still of the essence."
One way the ECB has bolstered eurozone economies is by keeping its interest rates at a record low of one percent.
Trichet was adamant that the rates were "appropriate" and added that the ECB wouldn't raise them until the third quarter next year at the earliest.
glb/dpa/Reuters/AP
Editor: Chuck Penfold