A surge in US employment growth strengthens hopes for a global economic upswing that will also propel euro zone recovery, the European Central Bank Vice President said in Dublin last night.
Mr Lucas Papademos said the ECB did not want to give an indication of the future direction of interest rates following its decision last week to leave them unchanged at an historic low of 2 per cent. It sees risks as balanced for now.
"Friday's strong US jobs data confirmed the ECB's assessment of a robust and broadening global recovery," Mr Papademos said.
Mr Papademos said in a question-and-answer session following a speech to the Institute of Chartered Accountants.
"Strong global growth, in fact, will underpin the gradual recovery of the euro zone expected for this year, which is expected to accelerate in 2005," he said.
Mr Papademos echoed ECB President Mr Jean-Claude Trichet, who said the ECB policymakers had not changed their view that the central bank's stance remained in line with price stability.
"The risks are balanced," Mr Papademos said. "This assessment of balanced risks has not changed. There are some upside risks and also some downside risks. From month to month, this may change, but on balance our assessment has not changed."
European Commission forecasts due tomorrow are expected to show that several countries, including Italy and The Netherlands, will join France and Germany in violating the deficit cap.
The ECB sees the budget pact - limiting divergence among the 12 separate fiscal policies in the euro zone member states - as a crucial complement to its single monetary policy.