ECB chief Trichet says euro is ‘credible’
Baku, December 3 (AZERTAC). The European Central Bank`s chief says the euro remains "credible" despite the debt crisis that has required the bailouts of Ireland and Greece and raised worries about the future of the shared currency.
A day after the ECB extended its special support measures for banks, Jean-Claude Trichet on Friday urged European governments to make a "quantum leap" toward reforming and cleaning up budgets to avoid falling deeper into turmoil. Speaking in Paris, he said, "This is no time for complacency."
The Spanish government, determined to avoid seeking a rescue of its own, approved a new austerity plan Friday that will cut back a key jobless benefit and sell off stakes in the national lottery and airports.
The ECB, the European Union and the 16 governments that share the euro are struggling to contain a crisis caused by too much state debt in some countries. They are trying to reassure bond investors that countries will not default and keep the interest rates on their debt loads from rising so high they can no longer afford to borrow.
Trichet would not comment Friday on whether the ECB has increased its purchases of government bonds by highly indebted countries like Ireland or Portugal to ease their borrowing rates.
Analysts and traders, however, speculate that the central bank has increased these purchases in recent days. Confirmation will arrive Monday, when the ECB publishes figures that will reveal how much it has bought in the past week, since Ireland`s bailout failed to ease market worries.
Trichet nevertheless insisted the 16-nation euro itself is not at risk.
"The euro is a credible currency. The euro is a currency that is considered just as credible for the next 10 years as for the last 12 years," he said.
The currency rose slightly against the dollar Friday, buoyed by Trichet`s pledge to extend crisis liquidity measures to banks and speculation the bond purchases are ongoing. The euro bought $1.3356 in afternoon European trading Friday, about the same as the night before in New York.
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