FRANKFURT (Reuters) - Euro zone economic recovery is expected to be modest while governments have to work hard to kerb public deficits, European Central Bank President Jean-Claude Trichet said on Thursday.
“Now we are in a stage of recovery, we are in black figures, not red figures. I expect, but I‘m very cautious and prudent, a modest recovery,” Trichet told CNBC television in an interview at the World Economic Forum in Davos.
He also said the current level of public sector budget deficits were not sustainable on both sides of the Atlantic.
He added that the European Stability and Growth Pact, which says member states’ deficits should be kept below 3 percent of gross domestic product, needs to be rigorously interpreted.
Reporting by Marc Jones and Sakari Suoninen