The euro zone will see a gradual, bumpy recovery over the coming quarters and shouldn't subside into a so-called double dip, a senior official at the European Central Bank said Wednesday.
Juergen Stark, a member of the ECB's executive board, said in a speech in Leipzig that the first half of the year probably will see more modest growth than the second half of 2009.
However, he said the 16-nation euro zone is unlikely to experience a new contraction, or double dip — predicting instead "a gradual and bumpy economic recovery in the coming quarters."
Stark said there are no identifiable risks to price stability at present, but said growth in the global economy and commodity prices in particular must be closely watched.
He said that Greece, which has a large budget deficit, "knows that it has to catch up on its homework."
He said the country's highest priority should be to reorient its economic policies and institute a consolidation program.
The euro has suffered recently from concerns about the debt problems of some of its weaker members, particularly Greece and Ireland.
The troubles have fueled speculation that those countries and the euro zone will face tough fiscal measures, such as spending cutbacks and higher taxes, that could limit growth in coming years.
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