Economic recovery will likely be limited and is no reason to shout for victory, European Central Bank Governing Council member Guy Quaden was quoted as saying.
Quaden said the German and French economies returned to slight growth in the second quarter of 2009 and had probably done so in a large number of countries in the third.
Technically the recession is therefore finished. But there is no cause to shout for victory. The recovery looks modest and fragile, he said in an interview in Belgian magazine Le Vif Extra published on Tuesday.
Quaden said economic activity today was mainly supported by budgetary measures, such as steps to promote car sales.
He said public sector indebtedness had replaced that of the private sector in the United States, which was set to have a budget deficit of some 12 percent of gross domestic product.
This cannot go on, Quaden said, adding that countries where savings were abundant, such as China, would have to take over as the world's engine of growth from U.S. consumers.
This will not happen quickly. And growth in the next few years will maybe be weaker than it was yesterday. But possibly also more stable.
Quaden said that the labour market would probably deteriorate for some time to come.
This was partly because it tended to lag economic developments and partly because of surplus capacity in several sectors -- finance, autos and, in some countries, construction.
Quaden said the influence of the financial sector was due to decrease, either spontaneously or through regulation.