BASEL, Switzerland (MNI) – The European Central Bank’s decision to
purchase public private bonds on the secondary market was not unanimous,
but rather taken by an overwhelming majority, European Central Bank
President Jean-Claude Trichet said Monday.

At the conclusion of a press conference at the Bank for
International Settlements, Trichet again underlined the importance of
strong fiscal policy in the Eurozone and rejected the idea that fiscal
consolidation could undermine needed growth in the Eurozone.

Asked whether the decisions reached over the weekend were
unanimous, he told Bloomberg TV: “On some of these decisions there was
unanimity…I will not give details, and on some there was an
overwhelming majority.”

Pressed, however, he conceded, “On the bond purchases we had an
overwhelming majority.”

“When you have obviously a bad fiscal policy, it hampers growth,
because it hampers growth through the confidence channel,” Trichet
noted, adding that weak fiscal policy hurts both business and household
confidence.

“I don’t think that we should present things as an arbitrage
between fiscal soundness and growth. It is two sides of the same coin,”
he said.

Asked to comment about the level of sovereign bond spreads in the
Eurozone, Trichet insisted, “We don’t decide what is the right
level…it depends on the quality of the signature to do that.”

It is “clear” that the Governing Council took its decision on
purchasing bonds “based on the absolute necessity for governments of the
Euro area to re-establish their own fiscal credibility,” he told
Germany’s ARD television. “I am not speaking for absolutely all, but for
a number of governments, this is absolutely essential.”

“Fiscal soundness is essential for the Euro area,” he emphasized.

“Our goal is price stability,” he underlined. “We will ensure price
stability in the medium term,” he told Bloomberg. “This is fundamental,
this is the primary mandate this is what the people of Europe is asking
from us and it is what we are doing with extreme determination.”

–Frankfurt bureau; +49-69-720142; tbuell@marketnews.com

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