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ECB's Trichet says he still sees eurozone economic growth at potential
(updates with background) FRANKFURT (Thomson Financial) - European Central Bank president Jean-Claude Trichet said he still sees eurozone economic growth at its potential rate, brushing off comments board member Yves Mersch made earlier. 'You know the position of the (ECB's) governing council, and of course last week's statement is still valid,' Trichet told journalists on the sidelines of an event. Dovish comments in an interview with Yves Mersch, Luxembourg central bank chief and member of the ECB, earlier suggested the European Central Bank may change tack and start considering rate cuts -- in stark contrast with its previously transmitted view. The euro fell sharply in response. Mersch said in an interview that 'there are factors that mitigate inflation risks' and suggested the ECB could 'look through' temporary high levels of inflation to the growth risks beyond. The downside risks to the euro zone economy have increased, he signalled. Trichet last week said that while euro zone growth moderated in the fourth quarter, the ECB still expects the euro zone's GDP growth rate to be around its potential rate. He said at the time the euro zone's economic fundamentals are sound, but cautioned that uncertainty about growth prospects remains high. [email][email protected][/email] mas/ajb/mas/ejp COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.