European Central Bank president Mr Wim Duisenberg said the current level of ECB interest rates is "in no way a hindrance" to economic growth.
Real, short and long-term interest rates are at their lowest level for 40 years, Mr Duisenberg told an ECB news conference.
He also said he sees no signs of any risks of deflation emerging in the euro zone, or even in Germany and Belgium, the two countries with inflation rates of close to 1 per cent.
There are already indications that the German inflation rate might be creeping up again, he said.
Nor did he see any danger of a credit crunch emerging at the euro zone level, with loans to the private sector continuing to grow at a rate of more than 5 per cent year-on-year, he said.
On fiscal policy, Duisenberg said the four euro zone countries which have not yet achieved a balanced budget need to start cutting their structural deficits from next year, and not from 2004 as France proposes to do.
"The adjustment has to start as soon as possible, that is 2003 to be precise," he said.
PA
