ECB chief hopeful on recession

EUROPE'S economic downturn will not be as severe as in the US and a synchronised global recovery will take place next year, European Central Bank vice president Christian Noyer said. He added that the risk of Europe tumbling into recession was 'relatively low'.

In an upbeat assessment during a visit to Tokyo, he urged investors to heed the lessons of history. 'There have been periods of great anxiety and a sharp drop in confidence, such as during the Gulf War, and very soon afterwards growth resumed and the world enjoyed a period of very strong economic development,' he said.

But he could not say exactly when the world upturn would begin, claiming uncertainty caused by last month's terrorist attacks in America made accurate predictions 'extremely difficult'. Europe was well placed to weather the storm because its economic 'fundamentals' were strong, he said.

Hailing the euro as a 'big success', he said in three years it had transformed European financial markets. He said the ECB was working closely with the Bank of England to ensure the necessary infrastructure was in place so that once the decision had been taken, Britain could join 'extremely rapidly'.