PARIS (MNI) - European Central Bank President Jean-Claude Trichet reiterated Monday that the Eurozone does not face a currency crisis but rather "a problem of financial stability due to the fact that some countries have not managed their budgets as they should have."
"For a long time we have determined that the problem is not the currency," Trichet said in a radio interview. "The currency has retained its value, the currency is credible, it inspires confidence."
"The problem is thus the credit rating of several states," he explained. "This is not astonishing. We have always said: 'Respect the Stability and Growth Pact, pay close attention to your deficit budgets. They are a weakness that absolutely must be corrected'."
"We are experiencing at this moment a very serious crisis, that has intensified over the past two and a half years," he stressed. "Thus everyone must take the necessary measures."
Trichet urged the Eurozone governments to monitor each other collectively via "much better governance" and to establish "a stabilization fund capable of assuming all its responsibilities."
"That means, concretely, to do more individually and do more collectively," he insisted, adding that this message applied to France as well.
Trichet reiterated that the ECB had fulfilled its mandate for price stability -- "an essential element of stability in a very difficult period."
Concerning Ireland's consolidation program, the ECB believes "this plan must be applied in a very rigorous manner," he said.
Trichet again rejected the notion that a country could leave monetary union as "an absurd hypothesis."
Source: Imarketnews
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