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ECB’s Bonello sees small economic recovery in 2010

  The euro zone economy is likely to recover slightly next year, European Central Bank Governing Council member Michael Bonello said on Thursday.

“It is very difficult to make predictions and projections; they are being changed all the time, even by the IMF. But the latest projection is for modest euro zone growth for next year of 0.1%,” Bonello, who also heads the central bank of Malta, said in a speech.

The ECB staff projections, published in early March painted a similar picture of next year’s growth outlook. The projections gave a forecast range of 0.7% drop in gross domestic product to a rise of 0.7% next year, for a midpoint of zero.

News agency Market News also reported that Bonello said he expected the ECB would have something to announce at its next meeting on May 7 on the topic of the non-standard measures it plans to use to boost the recession-hit euro zone economy. “By May, I expect we will have something to announce,” Market News quoted Bonello as saying.

ECB President Jean-Claude Trichet said last week the bank would lay out any plans it comes up with on that date. Bonello said the talk of new unconventional measures should not overshadow the measures the ECB has already taken.

“The important thing is that we have been taking non-standard measures and we have been trying to address the problem of the market rates and the credit flow,” Bonello said, and added the ECB has been adding liquidity to banks.

He later told Reuters no decisions on additional measures have been made yet. “We are studying other possibilities and in the near term we hope to be able to announce our decision on specific measures,” Bonello said. “But there is nothing more definite than that. There is a range of possibilities and no decision on any specific measures has been taken yet.” (Reuters)