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ECB's Trichet sees euro zone pick up in 2010

Published 02/12/2009, 01:23 PM
Updated 02/12/2009, 01:24 PM

OSNABRUECK, Germany, Feb 12 (Reuters) - It is reasonable to expect a euro zone economic recovery in 2010 and authorities should think about how to exit from rescue packages, European Central Bank President Jean-Claude Trichet said on Thursday.

Trichet said that, while there was still a huge amount of uncertainty over the economy and the current weakness was expected to continue in the coming quarters, there was some reason for optimism.

"It seems to be a reasonable working hypothesis that after an exceptionally difficult 2009, we will see an economic recovery in 2010," he said in a speech.

It was delivered in the home town of the president of the European parliament, Hans-Gert Poettering, and was Trichet's first in German.

"On the basis of our current analysis, we see persistent weakness in economic activity in the euro area over the coming quarters," he said.

"The economic prospects are still marked by an exceptionally high degree of uncertainty."

Professional forecasters surveyed by the ECB slashed their forecasts for both growth and inflation on Thursday.

They predicted inflation of just 0.9 percent this year and an economic contraction of 1.7 percent despite four ECB rate cuts since last October and extra government spending. [ID:nFAE002842]

(Reporting by Sakari Suoninen, writing by Marc Jones)

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