FRANKFURT (MNI) – The integrity of the European Central Bank is key
and protecting it is “non-negotiable,” ECB President Jean-Claude Trichet
told the Sueddeutsche Zeitung.

In an interview with the paper to be published on Saturday but
pre-released early Friday evening, Trichet said that governments have
followed the central bank’s advice by avoiding compulsory private sector
involvement in the Greece bailout package, and thus avoided provoking a
credit event.

“In case of selective default, the ECB and the Eurosystem would ask
for recapitalisation of the banks and for credit enhancement of our
collateral in order to have sound counterparties and eligible
collateral,” he said. “The protection of the integrity of the central
bank is non-negotiable.”

Trichet also noted that governments had followed the ECB’s advice
in other areas, including boosting the flexibility of the European
Financial Stability Facility and by declaring their “inflexible
determination” to follow through with what they say.

“Now the key word is ‘implementation’,” Trichet said. “Rigorous and
permanently controlled implementation.”

Trichet urged Greece to implement its structural reform program
“rigorously and comprehensively.”

“Scrupulous control of implementation, as well as very large-scale
technical assistance from the Commission, the International Monetary
Fund and the EU Member States are of the essence,” he said. He called

Greece “a unique case,” suggesting that other Eurozone states
should not count on similar treatment in the future.

Looking beyond Greece, the ECB chief repeated his call to
governments to take “decisive action” in order to correct past mistakes
and bring their public finances under control.

He also urged officials to be “permanently alert” and “ensure
fiscal soundness and preserve competitiveness. They cannot rely only on
the financial markets’ judgement,” he said.

Trichet reiterated the importance of separating the ECB’s standard
and non-standard measures.

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

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