Deutsche Bank's (DBKGn.DE) Chief Executive Josef Ackermann said the global economic crisis was likely to persist and that a recovery depends on an improvement in the U.S. real estate market.


We will remain in a very difficult phase for a bit longer, Ackermann said late on Thursday in a speech at an event in Berlin.


Ackermann's comments follow growing investor confidence that has boosted the FTSEurofirst 300 .FTEU3 European benchmark index by more than 34 percent from the lifetime low it hit on March 9.


The rate of contraction in the euro zone's dominant service sector eased further in May and business expectations rose to a 15-month high on hopes the worst of the recession is over, while Britain's service sector staged a surprise return to growth, surveys showed on Wednesday. [ID:nL3464877] [ID:nL327736]


Ackermann said that even though he saw signs that the economy was stabilising at a low level, the situation had still not normalised.


The economic situation was unlikely to improve until the U.S. real estate crisis was resolved, Ackermann said.


The U.S. housing market is so far showing no signs of a sustained recovery, with recent data showing a fall in mortgage applications. In the first quarter, U.S. mortgage defaults rose and house prices continued to fall.


U.S. mortgage applications fell last week, reflecting a plunge in demand for home refinancing loans as interest rates surged to their highest levels since late-January, data from an industry group showed earlier this week.


The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications which includes both purchase and refinance loans, for the week ended May 29 decreased 16.2 percent to 658.7.


The U.S. National Delinquency Survey, released by the Mortgage Bankers Association showed that 12 percent of all mortgages were delinquent in the first quarter, the highest level since the MBA started measuring 37 years ago.


Home prices fell 7.0 percent in the first three months of 2009, according to Standard & Poor's/Case-Shiller Home Price Indexes.


The deteriorating value of complex financial instruments tied to mortgage assets forced Deutsche Bank to make 7 billion euros in writedowns in 2008 and a further 1 billion euros in the first quarter of 2009.


A debt trading windfall helped Deutsche Bank trump market forecasts to swing to a first-quarter profit of 1.2 billion euros ($1.70 billion), masking erosion of its key businesses by the economic crisis, its financial reports showed in April.