(Adds further comments by Lagarde)
PORTO, Portugal (Thomson Financial) - European Central Bank president Jean-Claude Trichet defended the ECB's response to the current market turmoil against criticism by French president Nicolas Sarkozy.
Trichet said the ECB has acted to protect 'our fellow citizens' in Europe against fallout from the crisis and noted yesterday's endorsement by euro zone finance ministers for the central bank's response.
Speaking at a press conference at the end of a two-day gathering of EU finance ministers and central bankers in Porto, northern Portugal, he said that 'there has been a very positive appreciation by the ministers for what we have done'.
In a report today in French daily Le Monde, Sarkozy said that he 'found it curious (of the ECB) to inject liquidity without lowering rates,' he said.
The bank's governing council left rates unchanged on Sept 6 at its last meeting.
'Opportunities were created for speculators, the job of entrepreneurs was made more difficult,' he said.
But Trichet said: 'Everybody knows that we are not facilitating in any respect those who behave improperly. On the contrary we are protecting those who behave properly against the turbulence and drawbacks from those who behave improperly.'
He also observed that last week Sarkozy praised the ECB for keeping rates on hold.
'He even said it was thanks to his influence,' Trichet said.
German finance minister Peer Steinbrueck and Austrian counterpart Wilhelm Molterer were quick to leap to the ECB's defence.
'I think the policy followed by the ECB is appropriate,' Steinbrueck said.
'The ECB's action has been widely appreciated here', he said, adding that its independence should not be undermined.
Equally, Molterer said of Sarkozy's comments: 'I do not share this point of view.'
He added: 'We would be well advised in the current context to support the ECB.'
But French finance minister Christine Lagarde said Sarkozy 'was right to put the question of interest rates', adding that this is 'a real question'.
The issue is all the more relevant now given the rise in the euro since Sept 6, Lagarde said, adding that 'we should remain extremely vigilant on these questions'. victoria.main@thomson.com vm/vm/vm/vm COPYRIGHT Copyright AFX News Limited 2007. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.