The president of the European Central Bank said Monday he was watching very closely the global impact of the earthquake and tsunami on Japan, the world's third-largest economy. "We are looking very carefully at all what has happened in terms of the impact on the Japanese economy and the impact of the partners of Japan," Jean-Claude Trichet told the European Parliament in Brussels.
Earlier Monday, the World Bank warned that the disaster could cost Japan up to $235 billion, or 4.0 percent of output, and reconstruction could take five years. Trichet said that the usual pattern after such a catastrophe was to have a sudden dip in activity followed by a recovery as reconstruction work begins. It is a "very delicate balance" to judge what the overall impact would be, Trichet added.
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