VIENNA, Feb 25: European Central Bank council member Klaus Liebscher said on Monday the central bank’s current monetary policy stance was appropriate and the economic recovery would pick up speed in the second half of 2002.

“I think the current level (of ECB monetary policy) is appropriate, and I think it is neither tight nor restrictive monetary policy,” Liebscher said, bolstering speculation ECB interest rates are on hold at the moment.

Echoing comments from ECB President Wim Duisenberg earlier on Monday, Liebscher said the worst of the economic slowdown had passed and the recovery should accelerate in the second half of this year.

“Obviously (the economic outlook) is improving and most of the first signals show that the worst is behind us,” he said.

“We are looking with confidence at an improvement in the economic development, especially in the second half of the year.”

Liebscher said that lower levels of inflation achieved in the euro zone were good for purchasing power and would help boost domestic demand throughout the 12 member countries.

“I’m quite confident that we’re looking at a very improved situation,” he said.

In January, euro zone consumer price inflation rose to an estimated 2.5 per cent from 2.1 per cent in December.

The European Central Bank left official rates unchanged at 3.25 per cent in February after reducing them by 150 basis points since May 2001. Analysts now expect rates to stay on hold until the fourth quarter when they foresee a rise to 3.5 per cent.—Reuters