The European Central Bank president has hinted that the bank is positioning itself to keep interest rates steady at its monthly meeting next week, despite growing uncertainty about euro zone growth prospects.
'Although recently released economic indicators have been mixed, we remain confident in our expectation of a gradual recovery and continued, though modest, real GDP growth in the euro area,' Jean-Claude Trichet told the European parliament's economic and monetary affairs committee.
Although the Frenchman did not give a figure, the ECB has recently forecast the euro zone would see gross domestic product growth of about 1.4% this year after a mere 0.4% last year.
Trichet appeared even more optimistic about next year when growth would be underpinned by improving domestic demand, adding to firm foreign demand.
The optimism suggests that the ECB is likely to keep interest rates steady next week because concerns that lower borrowing costs were needed to stimulate the euro zone economy was the only argument that might have changed its opinion.
The ECB's governing council is to meet on May 6 in Helsinki for its monthly monetary policy setting session. Its key interest rate has stood at 2% for the last 10 months.
Mr Trichet also warned the committee that several EU member states risked posting public deficits in excess of EU rules in the years ahead. He said that because of the increase in public deficits the overall level of public debt in the euro zone was beginning to rise again after several years of uninterrupted decline.
