PARIS (MNI) – Simultaneous deficit reduction throughout the
Eurozone does not pose a risk for the economic recovery, ECB President
Jean-Claude Trichet argued Friday.
Asked in a radio interview whether the shift to fiscal
consolidation might bring a recession, Trichet replied, “I don’t think
so.”
EMU governments “are all committed to pursuing policies of
budgetary wisdom and common sense,” he said. “What we are asking is that
they respect their commitments.”
“The same message for all” governments, he said, is to “take all
the measures that allow you to make your objectives for next year
totally credible.”
“It’s very important for medium- and long-term stability, for
growth and for the creation of jobs,” he explained. “It’s also clearly
very important for confidence, notably for the confidence of investors
and savers.”
Such policies strengthen the confidence of consumers, business and
investors and savers — “which is good for growth,” he said.
“We have a credible currency, thus there is no crisis of the euro
as a currency,” he said. “We have problems of financial instability,
which are due to a budget crisis in certain European countries.”
It is possible for France to meet its deficit targets without
hiking taxes “if spending and particularly unproductive spending is
reduced sufficiently,” he said. “What counts is the result.”
Trichet reminded that the ECB was fiercely opposed to the measures
taken before the financial crisis to weaken budget surveillance within
the Eurozone.
He declined to comment on his eventual successor at the helm of the
central bank, reminding that this is a matter for government leaders to
decide.
–Paris newsroom +331 4271 5540; Email stephen@marketnews.com
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