IMF chief Mr Horst Köhler said yesterday the world's major economies had scope for further monetary easing if necessary and that he did not expect a global recession despite ongoing uncertainty.

But, speaking at a conference in Athens, he said major economies and Europe should do more to support economic growth. "I am particularly concerned that Europe is not doing enough for growth."

Mr Köhler was speaking three days after the European Central Bank (ECB) trimmed its benchmark interest rate to 2.5 per cent, its lowest level in four years, in response to a worsening outlook for the euro zone, the world's second biggest economy.

ECB board member Mr Tommaso Padoa Schioppa agreed that the state of the European economy was disappointing. "The problem is no longer just about the economic cycle... it is really and truly a problem of growth.

"The growth potential of the European economy is insufficient."

In an interview published yesterday he said the ECB had debated for a long time this week whether to cut the euro zone's interest rate by a half or quarter point. "Naturally we considered whether to cut by a quarter or half point, and we talked about it for a long time with valid arguments presented for both possibilities," Mr Padoa Schioppa told Italian daily La Repubblica.

Asked if the ECB should have cut rates by half a point as some had expected, he said: "[A quarter point] makes a difference but in this situation not much of one, mainly because Europe's economic problems don't have much to do with monetary policy."

Mr Kohler reiterated that he did not foresee a global economic downturn, despite current uncertainty. Full confidence was not likely to return while the possibility of a war in Iraq looms, he said, but a gradual recovery this year was likely.