–Retransmitting Story Published 14:31 ET Monday
–Committed To Solid Anchoring Of Inflation Expectations
–EMU Needs Solid Surveillance Of Fiscal Policy
–Trichet Regrets ‘Benign Neglect’ In Past Of Fiscal Policy
–Finance Ministry For Euro Zone A Project For ‘Day After Tomorrow’
LONDON (MNI) – European Central Bank President
Jean-Claude Trichet Monday night said while there was indeed a
‘likelihood’ that the bank’s Governing Council would hike rates again in
July, he insisted again that it was not precommitted.
Speaking to CNN International, Trichet said that a hike was
‘possible’ but ‘not certain’, echoing comments he made at last week’s
press conference and since.
The ECB was committed to “solidly anchoring inflation expectations
and this would work through the ‘confidence channel’ to bolster economic
sentiment amongst the euro zone citizenry. This would also help lower
long-term rates and so help growth,” Trichet said.
Trichet also said the euro zone’s current travails could be tackled
by enhanced governance of the single currency bloc. What is needed, he
said was a “solid surveillance of fiscal policy.”
The ECB chief regretted that at a certain point in the past there
had been “benign neglect” of fiscal policy by euro zone governments, a
reference to the period after 2005 when some major EMU governments
effectively thumbed their noses at the Stability and Growth Pact’s
limits on budget deficits.
Trichet said that the latter episode had led to problems.
Pressed on whether a euro zone finance ministry is needed, Trichet
replied that this was a project for the “day after tomorrow.”
**Market News International London Newsroom **
[TOPICS: M$$EC$,M$X$$$,MFX$$$,MGX$$$]
