ECB's Trichet defends Euro; asks governments to limit deficits
15 May 2010
European Central Bank president Jean-Claude Trichet today said the euro is strong enough to withstand any speculative attack, and called on eurozone governments to ensure that their budget deficits are under check.
"A currency which keeps its value fully in line with its definition of price stability - with annual inflation rate of less than 2 per cent, close to 2 per cent - over almost 12 years is a currency which inspires confidence," he told Germany's Der Spiegel magazine.
The magazine quoted Trichet as saying that European governments have to make significant changes in their economic policies to prevent a repeat of Thursday's euro plunge.
Trichet also denied any pressure on ECB to join a $1 trillion effort this week to prevent Greece's debt crisis from spreading across the eurozone and beyond.
Trichet, however, agreed that the financial markets were in their worst situation since World War II and possibly even since World War I. But he said the ECB has not relented on its principles of stability of the euro.
"Price stability is our primary mandate and compass. That being said, it is clear that since September 2008 we have been facing the most difficult situation since the Second World War - perhaps even since the First World War. We have experienced - and are experiencing - truly dramatic times," he said.
