–Adds Comments On EFSF And ESM To Story Sent At 10:18 GMT

BERLIN (MNI) – European Central Bank president Jean-Claude Trichet
said Thursday that the central bank is very alert with regard to the
Greek debt crisis, but he declined to judge the current French plan for
private creditor involvement in a new bailout package.

“At this stage, we have not yet a position of governments…that we
could examine,” Trichet told the European Parliament. “And I will say at
this stage, we are very alert; we are following what is going on but I
cannot give you a precise judgement or advice on what is going on.”

Trichet stressed once again that the ECB will not take part in any
rollover of its Greek bonds. “It is a private sector involvement,” the
ECB President stressed. “It is not a public sector involvement, so I
said already that we do not envisage to participate ourselves.”

Trichet said the ECB is following the negotiations between the
governments and the financial industry about private sector involvement
“very, very closely.”

“We had, as I said, our own advice, which is don’t embark on
compulsory operations and avoid selective default, avoid credit events!”
the ECB president reiterated.

“It is a global issue, we are the epicenter of a global tension of
sovereign risk. You have to see that this is the reality,” Trichet
cautioned.

The ECB president criticized those who discuss “with great ease
something which is only the first default of an advanced economy since
World War II.”

He urged everybody “to be highly, highly responsible.” As far as
the ECB is concerned, “we are permanently alert; we have even a concept
of permanent alertness,” Trichet reaffirmed.

“Again, what is at stake is the highest possible level of
responsibility by those who are in charge, which are the governments and
of course also the international community for the IMF, and Europe as a
whole for the Commission,” he said.

“As regards the crisis management, you know that we have asked
ourselves very, very clearly [for] the EFSF and the ESM to be as
flexible as possible,” Trichet reminded. “We call for maximum souplesse,
maximum flexibility…provided we have a strong conditionality.”

–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com

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