European Central Bank (ECB) chief Mr Wim Duisenberg said today conditions were right for a euro zone economic recovery.
Although the strength of the recovery is uncertain for now, conditions are in place in the euro area for a recovery, Mr Duisenberg said in a foreword to the bank's annual report. His remarks were prepared in March.
The ECB has held its benchmark interest rate steady at 3.25 per cent since early November, a level that the report said was appropriate to maintain medium-term price stability.
ECB Vice President Mr Christian Noyer warned today oil price rises could halt a decline in inflation this year but was confident economic growth would be on target by the end of the year.
In testimony to the European Parliament's Economic and Monetary Committee, Mr Noyer, who steps down from his post at the end of May, said the changeover to euro cash and notes had not impacted inflation overall.