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ECB chief predicts upswing

EUROPE'S central bank chief yesterday cautioned against any new government stimulus plans and predicted the global economy will pick up next year.

"We are seeing at this moment a slowdown in the drop in activity," Jean-Claude Trichet said on France's Europe-1 radio.

Global economic activity should come "close to stability" later this year, and "we should register the recovery of growth during the next year," he said.

He also welcomed signs of stabilization and renewed confidence in inter-bank lending.

He said any new stimulus packages would only drive governments deeper into debt that would saddle future generations.

Stimulus packages already in place "are completely extraordinary. In our analysis, this is sufficient," he said.

"There is a moment where you cannot spend more and accumulate more debts. We are at that moment," he said.

This reflects the position held by many European governments even as the United States government has pumped money into projects to end the recession.


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