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ECB’s Trichet: budget cuts won’t lead to new slump

09 July 2010 15:22 (UTC +04:00)

Baku - APA-Economics. European Central Bank President Jean-Claude Trichet dismissed warnings that drastic and simultaneous spending cuts planned by euro zone governments could send the 16-country bloc back into recession, Reuters reported.

.S. policymakers have called for continued stimulus to keep momentum in the global recovery, while many economists and academics have raised fears that austerity measures on the cards in Athens and a clutch of other European capitals could snuff out the euro zone’s nascent recovery.

"We (ECB) are totally against the view that reducing public expenditures will hinder economic growth," Trichet said on Friday at an ECB watchers conference organized by the Goethe University Frankfurt’s Center for Financial Studies.

"Consolidation measures will help turn the current upturn into sustained growth."