Europe's central banker says no more stimulus

PARIS - Europe's central bank chief on Sunday cautioned against any new government stimulus plans and predicted the global economy will pick up in 2010.

"We are seeing at this moment a slowdown in the drop in activity," Jean-Claude Trichet said on France's Europe-1 radio.

Global economic activity should come "close to stability" later this year, and "we should register the recovery of growth during the next year," he said.

He also welcomed signs of stabilization and renewed confidence in interbank lending.

He said any new stimulus packages would only drive governments deeper into debt that would saddle future generations.

Stimulus packages already in place "are completely extraordinary. In our analysis, this is sufficient," he said.

"There is a moment where you cannot spend more and accumulate more debts. We are at that moment," he said.

That reflects the position held by many European governments even as the U.S. government has pumped money into projects aimed at pulling the economy out of recession.

Trichet said governments and companies should immediately apply stimulus money and measures recommended by international financial institutions.

An end to the recession "depends on us," he said.

Trichet also said the unrest in Iran in the past week over its presidential election results could pose a "supplementary risk" to the global economy.

"There are not any effects so far on the global economy" from the Iranian opposition protests and clashes between protesters and police, he said. "It's a risk in a general sense."

He called it another argument for shoring up the international financial system.

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