PARIS - EUROPEAN states may need to force banks to start lending again, as credit markets - paralysed for months amid the financial crisis - remain too tight despite governments stimulus efforts, a senior European official said in an interview published Monday.

Mr Jean-Claude Juncker, the Luxembourg prime minister who also oversees meetings by the 16 nations that use the euro, said in French daily Le Figaro that there is no need for governments to act right now.

'But if the banks continue with their attitude, it can't be excluded that states will consider forms of legal pressure,' Mr Juncker said.

The current recession has been in part caused by the most severe financial crisis since the Great Depression, prompting governments to provide hundreds of billions of dollars (euros) in an attempt to spur banks to resume normal lending, an effort that so far has had mixed results.

Last week, French Finance Minister Christine Lagarde said her government is planning to inject a second tranche of euro10.5 billion (S$21.4 billion) into some of the nation's largest banks in an effort to spur lending.

In the interview, Juncker said he expects Europe's economies to have 'two difficult years in 2009 and 2010,' and to return to normal economic growth conditions in 2011 and 2012. -- AP