ECB 'to start withdrawal of emergency measures'
Published 28/01/2010 | 05:00
IT will be two or three years before the eurozone economies recover to pre-crash levels, but the ECB will have to start withdrawing emergency help even in the first half of this year, Bundesbank president and ECB council member Axel Weber said at the World Economic Forum's annual meeting in Davos, Switzerland.
"The economy took a really steep fall; it's been stabilising and will show a protracted recovery," Mr Weber said.
"As the economy improves, we'll take some of the exceptional measures back. Not all are needed to the same degree, so I don't rule out that we take some additional steps even before the second half."
"Weber is basically confirming a gradual winding down of all the remaining measures," said Silvio Peruzzo, an economist at Royal Bank of Scotland.
"They're making sure that all market participants understand. They want to avoid surprising the markets."
The euro rose against the dollar after Mr Weber's remarks to as high as $1.4081 and to 86.76p sterling.
Economists and business leaders attending the Forum differed over the prospects for recovery.
David Rubenstein, co-founder of the huge private equity firm The Carlyle Group, said it is a "pretty attractive" time to invest.
"There are a lot of great opportunities we see in the United States and abroad," Mr Rubenstein said. "Sometimes generals fight the last war, economists fight the last recession."
A survey of more than 1,000 chief executives which was conducted by PricewaterhouseCoopers (PwC) for the forum found 81pc of them from 52 nations were confident about the next year, but most were still worried by the threat of a protracted recession and intend to cut costs further.
Some 31pc described themselves as "very positive" -- an increase of 10 percentage points from a year ago, and 18pc said they were pessimistic, almost half of 2009's level. "We're not out of the woods yet. There is a cautionary view," Dennis Nally, global chairman of PwC said.
Less than a third of Americans surveyed at the end of last year said they trusted banks to "do what is right", consultants Edelman said in a report released at Davos.
Trust in the US government jumped to 46pc from 30pc.
"Trust in business has improved, but the patient has a long road to go for a full recovery," said chief executive officer Richard Edelman. "This state of fragility is particularly pertinent to the banking industry, a sector that has seen its credibility crumble in the Western world."