LONDON (MNI) – The European Central Bank will at some stage return
to its ‘original tool kit’, ECB Executive Board Member Gertrude
Tumpel-Gugerell said here today.

Tumpel-Gugerell also said that, while the central bank’s
bond-buying programme had slowed down of late, the purchases could be
used again if the ECB Governing Council deemed it necessary.

“It is important to keep in mind that the program had an effect,
but it has slowed down. But it is there as a potential tool,” she said.

In comments to reporters following an appearance at the European
Economic and Finance Centre here, the official said that the ECB’s
special liquidity measures had prevented worse outcomes from the crisis.

When asked whether divergence in recovery between EMU states would
complicate the ECB’s role in maintaining price stability, Tumpel
Gugerell said that although the recovery in Germany seeming to be more
robust there were still problems in Spain and Greece and other euro
zone economies.

“But Ireland is coming out of recession, it was just deeper. We
will always have different speeds and dynamics,” she said.

The first priority for governments now was to restore their fiscal
credibility, she said, and to phase out fiscal stimulus, echoing the
remarks made by ECB President Jean-Claude Trichet in an interview with
the Financial Times published this morning.

“What is a first priority is that governments restore confidence in
their ability to manage fiscal situations and banking systems,” she

The crisis had shown the need to bolster fiscal surveillance,
Tumpel-Gugerell said, as well as surveillance of differing inflation
developments across the zone.

She said that Greece had made ‘considerable progress’ in recent
months on the fiscal front.

She refused to be drawn on how the stress tests would impact on the
liquidity operations but said that the Governing Council would continue
to review its policies at its monthly meetings.

–Brussels: 0032 487 (0) 32 803 665,

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