PARIS, Nov 17 (Reuters) - The fiscal situation in some European countries is so bad there is a danger markets will lose faith in them, European Central Bank President Jean-Claude Trichet warned in an interview on Tuesday.
"Some countries are in a relatively favourable position because their past management was wise and prudent, while others are already very close to losing their credibility," he told French newspaper Le Monde, saying it could stall the recovery process.
This could even the stall the nascent recovery, he added.
"The success of the recovery in Europe depends on the confidence of investors in the creditworthiness of sovereign issuers."
A hit in government credit ratings would also increase interest rates in the private sector, he said, and added governments must get fiscal consolidation on a credible path in 2011 at the latest.
Trichet repeated his earlier comments key interest rates are appropriate at the moment and that the ECB will progressively unwind its non-standard measures.
He also repeated the well-worn line that it is important to note the U.S. authorities have stated the strong U.S. dollar is in their interest.
The euro was trading at 1.4912 at 1028 GMT, at levels some politicians have warned could handicap the euro-zone recovery.
Trichet also said third quarter euro zone gross domestic product (GDP) data, which showed the bloc pulled out of recession, confirmed the ECB's base scenario of a progressive pickup in the economy.
A Eurostat flash estimate showed last week the euro-zone grew 0.4 percent in the third quarter from the previous one.
But caution was still needed and there was much uncertainty, especially about next year's growth, Trichet added. "We cannot yet claim victory," he was quoted as saying. (Reporting by Anna Willard, writing by Marc Jones and Sakari Suoninen; editing by Chris Pizzey)