WILDBAD KREUTH, Germany (MNI) – European Central Bank President
Jean-Claude Trichet reiterated Friday his call for a stronger Stability
Pact, for further progress on fiscal consolidation and for an
“effective, rigorous framework for economic governance.”

“Today, governments have no choice but to change their policies,”
Trichet said in remarkes prepeared for a conference here of the German
CSU party, the Bavarian branch of the Christian Democrats.

Trichet highlighted the “tough and courageous decisions” taken by
Europe’s leaders last year. “None were easy, but they were necessary and
they are beginning to pay off,” he said.

However, the central banker stressed that “Europe cannot afford to
rest halfway” and that more work needs to be done. “We need to be more
ambitious,” he said.

“The proposals that we have seen in Brussels do not go far enough
in the ECBs view,” Trichet continued. “As I have said before, we need
to make a quantum leap in our economic governance. We must achieve a
framework where each and every country respects the principle that a
successful economic and monetary union is based on sound macro policies.
There must be a binding code of conduct for all parties concerned.”

Trichet noted that the ECB’s credibility “rested” on its
independence, as well as its transparency and consistency, and argued
that the Eurozone’s new surveillance framework needed to embody the same
principles.

Trichet outlined three “indispensable” elements that such a
framework should contain regarding fiscal policies, including shorter
deadlines for excessive deficit procedures, quasi-automatic application
of sanctions for states that breach the rules and ambitious debt
reduction targets. He also called for more focus on country debt levels.

“As I frequently said, all institutions, whether European or
national, must be up to their responsibilities,” Trichet said.

“The ECB is responsible for monetary union, in full independence.
The national governments, individually and collectively, duly
enlightened by the Commission, are responsible for the Economic Union.
The European governments have to fulfill their duties in full.”

He also called the euro a credible currency, “of which citizens can
be proud.”

“This is important for all the member states of our union, both
individually and collectively, as we together face the challenges of the
global economy.”

— Frankfurt bureau: +49-69-720 142; email: frankfurt@marketnews.com —

[TOPICS: M$$EC$,M$X$$$,MGX$$$$,M$$CR$]