–Adds Comments On Eurozone Activity In Q2
FRANKFURT (MNI) – Interest rate hikes by the European Central Bank
are not endangering the Eurozone’s peripheral economies, ECB President
Jean-Claude Trichet insisted Thursday.
“We consider that maintaining stability for an entire continent,
for 331 million fellow citizens, maintaining price stability,
maintaining confidence is essential for the prosperity of the entire
continent,” Trichet told a press conference here.
“All are benefiting from this confidence and stability being
preserved by our own action in line with our treaty mandate,” he
continued.
“The fact that we have, at the same time, difficulties in some
countries, so that there are risk premia, has nothing to do with the
fact that the solid soil on which the euro area is functioning is
precisely this soil of confidence that we are preserving.”
“If there was any increase in inflation expectations over the
medium term, this increase in inflation expectations would be
transmitted to all interest rates in all countries,” Trichet warned.
Trichet noted that recent growth indicators for the Eurozone as a
whole had been “less flattering”, but added that this did not change the
ECB’s medium-term perspective. A strong Q1 followed by some slowing in
activity had always been the expectation of the central bank, he said.
“Even when we were observing very good results in the first quarter
of this year, we were already saying that Q2 would slow down quite
significantly,” Trichet said.
At this time of “elevated uncertainty”, Trichet said that what was
needed was to maintain medium-term policy reasoning.
–London newsroom: 4420 7862 7492; email: ukeditorial@marketnews.com
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