Bundesbank president Ernst Welteke today said that the German economy in the fourth quarter will "probably see significant growth" compared to the third quarter. Welteke also told reporters that he expects the German economy to have "clearly higher growth" in 2004 compared to 2003, but that growth this year will be "around zero". The more than three year-long weakness in the German economy represents the longest such period since 1945, but there are signs now that it is on its way to recovery, he said. There are signs of an economic pick-up in Europe, and the world economy is now in recovery because of the strong impetus coming from the US, he said.
He added though that the US 'double deficit' poses a risk to the US economy, and added that its recovery may "not be sustainable" as a result. Welteke also said that the EU stability pact is a basic pillar of European currency union. He warned that any relaxation in the pact would only increase the damage already done to confidence by the Ecofin's decision last month to suspend the budget deficit sanctions procedure. //www.fxcentre.com