No 'firm recovery' for European economy: Barroso

(BRUSSELS) - Europe's economy has not made a "firm recovery" from the crisis and the situation remains "very volatile" despite some encouraging signs, EU Commission chief Jose Manuel Barroso said Tuesday.

"The impact of the financial and economic crisis is still tangible in Europe and we have much still to do," he said at a joint press conference with Lithuanian President Dalia Grybauskaite.

Lithuania is suffering the worst recession in the European Union.

"Several European countries are seeing encouraging signs of recovery but firm recovery is not here yet," Barroso cautioned.

Last week a closely-watched survey showed the eurozone economy stabilising in August.

But while Germany and France have pulled out of recession and have nearly managed to bring the rest of the eurozone with them, analysts say much of the recovery is due to massive government stimulus measures for businesses.

Unemployment is also rising as companies struggle to stay viable.

"I think we should avoid any kind of complacency," the former Portuguese prime minister said, describing the situation as "very volatile."

"We need to keep a very determined action, do everything we can to exit the crisis and have a sustainable recovery."

Barroso's cautious comments came as US President Barack Obama warned that the US economy had a "long way" to go before it reached full recovery.

"Of course, as I have said before, we are a long way away from a completely healthy financial system and a full economic recovery," Obama said as he reappointed Federal Reserve Chairman Ben Bernanke to a second term.