BRUSSELS (MNI) – “Companies in the Eurozone do not have to worry
about price stability,” European Central Bank President Jean-Claude
Trichet said late Tuesday.

Speaking at a gala dinner in the European capital, Trichet avoided
current economic developments and spoke largely of economic governance
in the area.

The ECB has accomplished much since its inception, Trichet
asserted. Average inflation of just under 2% over the last 12 years was
achieved “during challenging times,” he said, pointing to a variety of
adverse factors including rising commodity prices.

“Yet throughout these very different economic shocks — which could
have had either inflationary or deflationary consequences — citizens
and market participants in the euro area have remained confident in our
commitment,” he said. “Inflation expectations have been firmly anchored
in line with our definition of price stability.”

Trichet reminded his listeners of his call for “substantially
deepened economic union” and urged authorities to “tackle the most
urgent issues by implementing the structural adjustment programs that
are currently underway.”

The ECB was particularly pleased at the European Parliament’s
support for making the Stability and Growth Pact’s procedures more
automatic, he said.

“A reform of these procedures has to be a sine qua non of a
determined response to the current crisis,” he said.

He continued: “In this context, the Governing Council of the ECB
regrets that the European Council did not decide to espouse the European
Parliament’s views on this issue at the end of last week. This is an
issue of key importance for the ECB. We consider that an essential
progress in decision-making procedures…is to make them more
automatic.”

If the Council had less scope in the suspension or stopping of
excessive deficit procedures prior to the crisis, he said, “some of the
euro area countries would not be facing as severe a sovereign debt
crisis today.”

Trichet urged that all parties assume their responsibilities and
“agree on an ambitious governance package” including fiscal and
macroeconomic policy surveillance.

The ECB agrees with the four goals of the Euro Plus Pact, he said,
but “concrete action” on it is needed in addition to the declarations
that have been made.

In other comments, Trichet urged completion of the single market.

–Frankfurt bureau tel.: +49-69-720142. Email: dbarwick@marketnews.com

[TOPICS: MT$$$$,M$$EC$,M$X$$$,M$$CR$,MGX$$$]