There is no room for governments that have borrowed billions to fight the economic crisis to accumulate more debt, European Central Bank President Jean-Claude Trichet said on Sunday.
"There is a moment where you can't spend anymore and you can't accumulate any more debt. I think we are at that moment," Trichet told Europe 1 radio.
He said the massive injection of funds into the economy through government stimulus packages had been the appropriate response to the economic crisis but he said states would have to bring public finances back under control as soon as possible.
"We are in exceptional circumstances at the moment," he said, adding that markets and consumers had to be convinced that governments would return to a normal budget situation.
He said there was very wide agreement that the economy would be showing clear signs of recovery by 2010.
"In that hypothesis, we will have growth coming back again and so we have to begin the operation which consists of moving progressively toward balance," he said.
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