Tags: ECB | Little | Risk | Double-Dip | Recession

ECB Official Sees Little Risk of Double-Dip Recession

Monday, 16 Aug 2010 07:02 AM

European Central Bank (ECB) Governor Patrick Honohan said on Monday he sees very little risk of a double-dip recession and that the ECB holds a similar view.

"The U.S. economy (has) some concerns, the European economy a gradual recovery. China and Eastern is the bright point so there's not really anything surprising or different from my view," Honohan told reporters in Hong Kong.

Honohan is a member of the European Central Bank's governing council and one of those with interest-rate setting powers.

Honohan also commented on Ireland's bailout of Anglo Irish Bank when speaking in Hong Kong.

The bailout is partly behind the country's soaring budget deficits and is "costly but manageable," Honohan said.

Honohan reiterated the country's budget deficit would be around 20 percent of its annual GDP this year despite continuing troubles at the bank, which is receiving extra state aid.

"It's a terrible shock to the system. It's costly but it's manageable." Honohan said during a speech in Hong Kong.

The European Union last week approved plans for up to 10 billion euros ($12.75 billion) of state aid for Anglo Irish, and Honohan said on Sunday that plans to recapitalize the bank were well on track and had little impact on the government's overall deficit plans.

Honohan had said Ireland remained committed to its target of reducing its budget deficit to 3 percent of gross domestic product by 2014. But this year its budget deficit is not going down but up.

"It's a very high deficit measured this year because we're taking the hit, we're acknowledging the losses in the banking system and those losses which are being paid for by the government have to be included in the deficit," he said.

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European Central Bank (ECB) Governor Patrick Honohan said on Monday he sees very little risk of a double-dip recession and that the ECB holds a similar view. The U.S. economy (has) some concerns, the European economy a gradual recovery. China and Eastern is the bright...
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2010-02-16
 

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