FRANKFURT (MNI) – European Central Bank President Jean-Claude
Trichet on Monday called on governments throughout the Eurozone to
intensify “credible” consolidation efforts and stressed the importance
of “appropriately” restructuring the Eurozone’s banking sector.

“By repairing their own balance sheets, implementing sound and
effective risk management strategies, the banks in the euro area will
increase their resilience to domestic and external shocks, which would
allow them to make their contribution to sustainable growth and
financial stability,” Trichet said in the text of a speech delivered
here.

The ECB chief also stressed that strengthened fiscal surveillance,
“for all its critical importance”, was not sufficient and that
“reinforced macroeconomic surveillance” was also needed.

Regarding fiscal policies, Trichet stressed that it was no longer
possible for authorities to delay the actions necessary to rebuild
public confidence and called on governments to “pursue credible
multi-year consolidation plans and fully implement the planned
consolidation measures.”

“In this context, let me express the appreciation of the Governing
Council for the economic and financial adjustment programme which was
recently agreed by the Irish government with the European Commission, in
liaison with the ECB and the International Monetary Fund,” Trichet
continued.

“I am sure the programme is suited to bring about a sustainable
stabilization of the Irish economy and soothe the tensions in financial
markets that are associated with the Irish fiscal problems and the
reorganization of the banking sector,” he added.

Trichet, however, reiterated his criticism that current Eurozone
reform proposals do not go far enough.

“Let me state clearly – also on behalf of the Governing Council of
the ECB – that we are not completely satisfied of the proposals put
forward by the Commission and the European Council Task Force,” he said.

“These proposals in our view do not yet represent the quantum leap
in economic governance that is needed to be fully commensurate with the
monetary union we have created.”

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

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