OECD chief Angel Gurría said today the European Central Bank (ECB) and euro zone finance ministers were taking a more balanced view of inflation and growth.
"I have no doubt that today, not only monetary authorities but fiscal authorities, and analysts, everybody, is taking a more a balanced view between inflation and growth," the secretary general of the Organisation for Economic Cooperation and Development said.
Last month, ECB staff forecast euro zone growth of around 2 per cent in 2008, but a number of members of its Governing Council have since doubted whether this will be achieved.
Mr Gurría said European governments needed to decide on a country-by-country basis whether or not to embark on a fiscal stimulus programme such as the one planned by the United States to counter growing fears of a possible recession.
"Some countries have little room, some countries have created it," Mr Gurría said.
The head of the International Monetary Fund, Dominique Strauss-Kahn, said yesterday that governments seeking to offset the global economic slowdown should look at targeted budgetary measures to boost demand and not rely solely on interest rate cuts.
Mr Gurría said he welcomed the Federal Reserve's cut of US interest rates by half a percentage point on Wednesday, just eight days after the US central bank slashed rates by three-quarters of a point.