AIX EN PROVENCE, France (MNI) – ECB president Jean-Claude Trichet
Sunday downplayed fears of a double dip recession despite a recent spate
of soft economic data, saying he didn’t think another recession was on
the cards, according to French and Italian press agency reports.
“I don’t think so at all,” Trichet was quoted as saying by Agence
France Presse and Ansa. “At a global level it is clear that we are
experiencing a recovery, which is confirmed particularly in the emerging
world but also in the industrialized world,” he said at an economics
conference in the south of France.
But Trichet cautioned that growth could not be taken for granted in
industrialized countries, which he said must take measures to “reinforce
confidence.”
“If you want durable and sustainable growth over the long term, it
is necessary to reinforce confidence,” Trichet said, according to Ansa.
“And that means to have budget policies that are balanced and
sustainable in everyone’s eyes — in the eyes of families, whose
confidence is fundamental for growth; of businesses, which must be ready
to prepare the future; and of investors.”
He said the deficit cutting measures being implemented in many
European countries “will not damage economic growth.”
The EU’s Stability Pact must be reinforced, the ECB chief
continued, “because in the context of the current treaties it is
necessary that prevention and sanctions be intensified to the greatest
extent.” He said sanctions should be “quasi-automatic,” repeating a
phrased he uttered last month in European Parliament.
Trichet also said the ECB insists on the need “to monitor carefully
not only budget policies but also indicators of competitiveness.”
For now European leaders should as much as possible under the
current treaties to take “a big leap” forward. “Later the treaties can
be modified, but at present it is necessary to reinforce prevention to
the maximum extent,” he was reported as saying.
–Paris newsroom, +331-42-71-55-40; bwolfson@marketnews.com
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