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Trichet Speaks--He Wants To Be Clear--But Isn't

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Highlights - Trichet responses to EU Parliament questions

18:12, Tuesday 30 November 2010

BRUSSELS (Reuters) - Following are comments by European Central Bank President Jean-Claude Trichet in response to questions at a hearing of the Economic and Monetary Affairs Committee of the European Parliament in Brussels.


"It is absolutely clear that in all countries without exception, without any exception, even those who are extremely well behaving in the real economy today, structural reforms could improve the growth potential of our economies. And it is of course the case of Portugal. So I fully share your view that structural reforms in Portugal, including in the labour market, could permit Portugal to surmount its problems much better. Because it is absolutely clear; growth of the real economy through structural reforms is something which is absolutely of the essence, on top of sound policies that are pursued with resolution and I would say over medium term, medium, long term."


"We (the ECB) are credited to deliver the same price stability over the next 10 years. That is our mandate. All -- part of your questions are totally out of the mandate. Totally (Berlin: UKX.BE - news) out of what we are called for, of our responsibility, addressed to other entities. So I want to be very clear on that. I said myself we should not speak (out of turn).

"Verbal discipline. Verbal discipline is essential. Absolutely essential.

"I am not responsible for the policies of the Greek government. We are not responsible for monitoring the these, for different countries. It is up to them and the Commission. The Council of course have their role to play there. We have always said to all countries -- you have to manage your affairs in the most reasonable and prudent manner possible."


"Price stability is better delivered in the euro area, fully inline with the treaty, fully in line with what you have asked for, than it was the case before in a very large number of economies that our founding fathers, if I may, of the euro area. We are credited to deliver the same price stability over the next 10 years. That is our mandate."


"There is a kind of compensation between those who weren't going too well before and those who were perhaps going too well before, and now they are not doing as well. Overall, I don't want to give you the impression that I am complacent at all.

"This is a very difficult period. It is a very, very difficult period. However when we look at the actual economy, well, I can't see anything else thus far since return to growth after that recession.

"It was the worst recession since the Second World War. We have had two good surprises in comparison with the forecasts. But it is perhaps a bit better than forecast. We will be publishing our forecasts in two days' time and we will see what they say. But that has been the case thus far."


"We have got a monetary federation. We need quasi-budget federation as well. Yes, we could achieve that if there is strong monitoring and supervision of what there is. Because what exists doesn't correspond with the actual situation that we are facing. It is a situation where we need quasi-federation of the budget."


"I only clarify that for us we have the monetary policy stance, which is designed to ensure price stability; and we have the non-standard measures that are there to permit to have, when needed, a better functioning of the monetary policy transmission mechanism when you have markets that are hampered and difficulty precisely to channel the interest rates that we are deciding."


"This is one of the non-standard measures that we have decided. I have no other comment that; it is a decision of the Governing Council. It has been decided upon because we considered that the monetary policy transmission channel were impaired in a way which we judged according for helping restoring this transmission channel. As you know, it is not changing the monetary policy stance because we withdraw the liquidity that is injected through this program. This morning we withdrew again the liquidity which had been interjected. We do that every week. We will see what we decide for the future. It is entirely the decision of the Governing Council. But this program is ongoing."


"I don't believe that financial stability in the euro zone, given what I know could really be called into question in a serious way. Now, okay, for the moment we can see that there is a problem; but I don't think it will really be called into question fundamentally." :blink:


"For me, the governments, aware of what happened and faced with this situation that is doubtless difficult, are now taking the decisions that they regard as appropriate and which are particularly -- perhaps undervalued by commentators at the moment. I would say by the way that pundits are tending to underestimate the determination of governments and the determination of the college that makes up the Eurogroup, and indeed the 27-member state Council."


Is Jean Claude drunk or on something? Makes no sense.

Edited by Realistbear

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From the frontpage, thx. Trichet From The Bunker: world-class flannel:

"I don’t believe that financial stability in the euro zone could really be called into question,” Observers “are tending to underestimate the determination of governments.”


“We have to reinforce the authority of the public authority,” Trichet said. “It is on the authority of the public authority that we can continue the resistance to an environment which is very demanding and will continue to be demanding for a period of time.”


Trichet called on European policy makers to improve communications as the crisis worsens.


"We need to get back to a more precise concept of communication,” he said. “We need clarity. Clarity, clarity. Verbal discipline is of the essence.”

I feel more secure already...


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Verbal discipline - but above all the ability to waffle on and on without discipline to fill the time allocated.

At least you know pretty much exactly what Farage is saying.

Edited by billybong

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