The European Central Bank's chief economist says the worst of the euro zone's economic crisis is over. But Jurgen Stark told reporters at a conference in Frankfurt that the policies of other major economies were unsustainable.
'The most recent economic data is confirming that the recovery will continue,' Stark said. Referring to the euro zone debt crisis, he said European governments and the ECB had the situation under control 'since early May'.
Financial markets began to fear some banks could become insolvent, owing to heavy levels of bank lending to some euro zone governments and property sectors.
The crisis was described as a wake-up call to euro zone governments that Stark said were now serious about budgetary reforms and more structural changes as well.
'In leading economies in the world I don't see this commitment to fiscal consolidation, I see the contrary,' the ECB economist said. The US has urged major European countries like Germany to provide more economic stimulus, but such policies will 'in the end will turn out not to be sustainable,' Stark warned.
Earlier in the day, ECB president Jean-Claude Trichet warned that many countries in the industrialised world 'have reached the limits of fiscal expansion'.
Stark also criticised the International Monetary Fund's latest assessment of euro zone growth prospects, saying it was underestimating the strength of the recovery in the euro area.
