UDPATE 1-ECB's Quaden sees no double dip in Europe

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Thursday September 09, 2010 04:41:18 AM GMT

* Says euphoria premature, optimism legitimate

* Sees double-dip even less likely in Europe than in U.S. (Adds extract from interview in De Tijd)

BRUSSELS, Sept 7 (Reuters) - European Central Bank Governing Council member Guy Quaden does not see a relapse into recession in Europe, according to brief extracts of interviews with Belgian business dailies L'Echo and De Tijd.

"Euphoria is premature, but optimism about the economy is legitimate," De Tijd quoted the governor of the central bank saying.

"We start from a positive, albeit weak, growth in the coming quarters. A double dip in Europe is unlikely. In any case, even less (likely) than in the United States," he continued.

L'Echo and De Tijd, French- and Dutch-language sister papers, both published very short extracts on their websites on Tuesday of interviews they plan to publish on Wednesday.

"Thanks to the acquisition program for government bonds, in combination with the establishment of the European stabilisation fund, a drama like that of Lehman Brothers in the United States in 2008 could be avoided," Quaden told De Tijd.

Quaden told L'Echo that the primary objective of monetary policy is and must remain price stability.

"But past experience also teaches us that price stability does not guarantee financial stability. Central banks must even more take into account this problem," he said.

Quaden continued that to do so there must be complete and immediate information on the prevailing situation in financial institutions. (Writing by Philip Blenkinsop, Editing by Chizu Nomiyama)

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