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ECB to start withdrawing emergency bank support

The European Central Bank will begin to gradually withdraw its support for the European financial system.

ECB president Jean-Claude Trichet said yesterday that although economic recovery in Europe is uncertain and fragile, it would start to withdraw some of its liquidity measures, according to The Independent.

He said the interest rate for the eurozone is likely to be held at 1 per cent until well into next year.

Trichet said: “The improved conditions in financial markets have indicated that not all our liquidity measures are needed to the same extent as in the past.”

Trichet said he expects the eurozone economy to grow by 0.8 per cent during 2010 and by 1.2 per cent in 2011.

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