MILAN (MNI) – The economic recovery in Europe is still fragile and
though the worst is past, there could well be more bumps ahead, European
Central Bank President Jean-Claude Trichet said Friday evening.
“We don’t exclude a bumpy road ahead of us,” Trichet told an
audience at Bocconi University in Milan. In general, though, “the
economy has turned the corner,” he said. He also noted that inflation is
“moderate.”
But he warned that the nations of the world must learn the lessons
of the crisis and revamp institutions in a way that reduces systemic
risk and moves increasingly towards global integration of financial
supervision.
Governments will not be able again to put up the enormous sums of
money they did in the recent crisis to avert systemic collapse, Trichet
said. “Taxpayers cannot be expected to put up 25% of GDP again to avert
a collapse of the financial system,” he said.
Trichet warned that protectionist pressures, which have been
mounting since before the crisis, have intensified since its onset in
late 2008. “A repeat of the 1930s is not in the cards, but we must
remain vigilant,” Trichet said.
–Frankfurt bureau: +49-69-720 142, email: frankfurt@marketnews.com
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