LISBON, May 6 (Reuters) - The following is a raw,
unedited transcript of the Question and Answer section of the
news conference given by European Central Bank President
Jean-Claude Trichet.
The transcript is provided by StreetEvents. For further details click www.streetevents.com
- For the TEXT of Trichet's introductory statement, click: - For the main story on the ECB Governing Council meeting, click:
JANA RANDOW Hello. Jana Randow with Bloomberg news. Mr. Trichet , I have three questions for you. The first one is is the purchase of government bonds an option to fight the consequences of Greece's fiscal crisis on financial markets? Did you discuss this option today - The second one is does the European Union, in your opinion, need an orderly default procedure for its member countries? And the third one would --?
JEAN-CLAUDE TRICHET I'm sorry, could you repeat the second question?
JANA RANDOW Does the European Union need an orderly default procedure like proposed by various governments, rather politicians in various governments for its member countries - And the third one would be why did you decide to suspend the rating requirements for Greek government bonds alone? Wouldn't it have been more of a signal to say we accept all government bonds from all member countries full stop? Thank you.
JEAN-CLAUDE TRICHET Thank you very much indeed. On your first question, I would say we did not discuss this option. On the second question , we did not discuss at all anything like default or such a default procedure . And on the contrary, as you know, we are firmly on the side of the fact that the various -- Greece, of course, which is the country that I quoted in my introductory remarks, will not default. And I will come to Greece now because it's the third question. The position of the Governing Council is the following. There are three major reasons that enlightened the decision of the Governing Council when on Sunday we took the decision that you know on the Greek bonds -- treasuries eligibility. The first consideration is that we had called ourselves very, I would say, strongly for Greece to embark in a recovery program, in an adjustment program, which would be very ambitious. I made myself the point on behalf of the Governing Council in the meeting of the heads that took place in February, very, very strongly. And we had, as a consequence of this recommendation, a recovery program, an adjustment program, which has been negotiated. We were part of this negotiation because the Governing Council had accepted that we would be in liaison with the Commission. The Commission in liaison with the ECB. We had several experts on the spot in Athens to follow up and be very, I would say, alert in this negotiation. You might remember that Juergen Stark went also in Athens with Commissioner Olli Rehn to follow what was going on in terms of recovery program. That is a very important point . Second important point, we had been called to make a judgment as a fully independent institution on the quality of the program that had been negotiated by the Commission in liaison with us and by the IMF . And the Governing Council decided that this was a recovery program that was appropriate. And I shipped this judgment, positive judgment of the Governing Council under the recovery program of Greece, the multi-recovery program of Greece to the governments of Europe. They had asked for our independent assessment. We made this assessment that it was shipped to the governments of the euro area as soon as during the meeting, which took place last Sunday . Third point, we were also asked by the government of Europe to -- namely by the heads -- to make an independent judgment on whether or not it was appropriate to activate the loans, the bilateral loans that they envisaged themselves to activate, but only on the basis of our own independent judgment and by the way also on the judgment of the Commission . And the Governing Council, taking fully into consideration the situation of the recovery program of Greece, decided that it would indeed tell the governments that there was a case for activating the bilateral loans that together with the IMF contribution would finance the multiyear recovery program. It is on the basis of these three points that the three of them courting for positive judgment and assessment by the Governing Council that we considered that we were ourselves sufficiently aware of the recovery program of Greece and sufficiently determined in approving this recovery program that we had to be consistent with this judgment as regards the eligibility of the Greek treasury. And we took that decision, again, the very same day, which was last Sunday, and of course, it was made public, as you know, last Monday. That is the response to your third question. Thank you for your excellent questions.
JOHANNA TREECK Johanna Treeck, Market News. You said you didn't discuss the option of buying government bonds. Can you consider discussing it in the absence of deflationary dangers in the euro zone - Second question is has the ECB recently made margin calls on the declining value of euro zone sovereign bond collaterals? If not, which bonds have been included and excluded? And what would be your plan going forward? And finally, has, for the ECB, saving the euro zone become the prime target, trumping even ensuring price stability?
JEAN-CLAUDE TRICHET I'm sorry, could you repeat the last question?
JOHANNA TREECK Has saving the euro zone become your prime objective - And would you do that even at the risk of, say, endangering price stability?
JEAN-CLAUDE TRICHET Thank you very much again for your questions. On the sovereign bonds, I already said we did not discuss the point. On your second point, I would say that we permanently review what we are doing, but, at the present moment, we are applying what we are -- what we have decided as regards to our rules. On the third point, which is the very important one, we are inflexibly attached to price stability. It is our primary mandate . It is what the people of Europe has asked for us -- from us, and we are credible in this respect. I already told you that, at the end of the year, depending of course on ultimate adjustment, but we will boast average inflation over the first 12 years of the euro at a level which would be below 2%, close to 2%, so exactly in line with the definition of price stability we gave, I would say, 12 years ago. This is a remarkable results, not only because we did what we had said we would do and you know in this domain, as in all others, what counts are facts and figures and demonstrated capacity to ensure price stability . It's also remarkable because, with this record, we would be in a better price stability situation than has been observed in any particular country in the euro area in the '90s or in the '80s, not to speak of the '70s, which everybody knows was a period of very high inflation . So this is a remarkable demonstration of our inflexible attachment to price stability in the euro area. And when we had to cope with the start of the financial crisis in '07 and '08, you remember that we always had a sense of direction . We had a sense of direction . We took a number of nonconventional measures, which never hampered the anchoring of inflation expectations. It is what we do now and we will continue to do that. I have to say with great determination.
COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The transcript is provided by StreetEvents. For further details click www.streetevents.com
- For the TEXT of Trichet's introductory statement, click: - For the main story on the ECB Governing Council meeting, click:
JANA RANDOW Hello. Jana Randow with Bloomberg news. Mr. Trichet , I have three questions for you. The first one is is the purchase of government bonds an option to fight the consequences of Greece's fiscal crisis on financial markets? Did you discuss this option today - The second one is does the European Union, in your opinion, need an orderly default procedure for its member countries? And the third one would --?
JEAN-CLAUDE TRICHET I'm sorry, could you repeat the second question?
JANA RANDOW Does the European Union need an orderly default procedure like proposed by various governments, rather politicians in various governments for its member countries - And the third one would be why did you decide to suspend the rating requirements for Greek government bonds alone? Wouldn't it have been more of a signal to say we accept all government bonds from all member countries full stop? Thank you.
JEAN-CLAUDE TRICHET Thank you very much indeed. On your first question, I would say we did not discuss this option. On the second question , we did not discuss at all anything like default or such a default procedure . And on the contrary, as you know, we are firmly on the side of the fact that the various -- Greece, of course, which is the country that I quoted in my introductory remarks, will not default. And I will come to Greece now because it's the third question. The position of the Governing Council is the following. There are three major reasons that enlightened the decision of the Governing Council when on Sunday we took the decision that you know on the Greek bonds -- treasuries eligibility. The first consideration is that we had called ourselves very, I would say, strongly for Greece to embark in a recovery program, in an adjustment program, which would be very ambitious. I made myself the point on behalf of the Governing Council in the meeting of the heads that took place in February, very, very strongly. And we had, as a consequence of this recommendation, a recovery program, an adjustment program, which has been negotiated. We were part of this negotiation because the Governing Council had accepted that we would be in liaison with the Commission. The Commission in liaison with the ECB. We had several experts on the spot in Athens to follow up and be very, I would say, alert in this negotiation. You might remember that Juergen Stark went also in Athens with Commissioner Olli Rehn to follow what was going on in terms of recovery program. That is a very important point . Second important point, we had been called to make a judgment as a fully independent institution on the quality of the program that had been negotiated by the Commission in liaison with us and by the IMF . And the Governing Council decided that this was a recovery program that was appropriate. And I shipped this judgment, positive judgment of the Governing Council under the recovery program of Greece, the multi-recovery program of Greece to the governments of Europe. They had asked for our independent assessment. We made this assessment that it was shipped to the governments of the euro area as soon as during the meeting, which took place last Sunday . Third point, we were also asked by the government of Europe to -- namely by the heads -- to make an independent judgment on whether or not it was appropriate to activate the loans, the bilateral loans that they envisaged themselves to activate, but only on the basis of our own independent judgment and by the way also on the judgment of the Commission . And the Governing Council, taking fully into consideration the situation of the recovery program of Greece, decided that it would indeed tell the governments that there was a case for activating the bilateral loans that together with the IMF contribution would finance the multiyear recovery program. It is on the basis of these three points that the three of them courting for positive judgment and assessment by the Governing Council that we considered that we were ourselves sufficiently aware of the recovery program of Greece and sufficiently determined in approving this recovery program that we had to be consistent with this judgment as regards the eligibility of the Greek treasury. And we took that decision, again, the very same day, which was last Sunday, and of course, it was made public, as you know, last Monday. That is the response to your third question. Thank you for your excellent questions.
JOHANNA TREECK Johanna Treeck, Market News. You said you didn't discuss the option of buying government bonds. Can you consider discussing it in the absence of deflationary dangers in the euro zone - Second question is has the ECB recently made margin calls on the declining value of euro zone sovereign bond collaterals? If not, which bonds have been included and excluded? And what would be your plan going forward? And finally, has, for the ECB, saving the euro zone become the prime target, trumping even ensuring price stability?
JEAN-CLAUDE TRICHET I'm sorry, could you repeat the last question?
JOHANNA TREECK Has saving the euro zone become your prime objective - And would you do that even at the risk of, say, endangering price stability?
JEAN-CLAUDE TRICHET Thank you very much again for your questions. On the sovereign bonds, I already said we did not discuss the point. On your second point, I would say that we permanently review what we are doing, but, at the present moment, we are applying what we are -- what we have decided as regards to our rules. On the third point, which is the very important one, we are inflexibly attached to price stability. It is our primary mandate . It is what the people of Europe has asked for us -- from us, and we are credible in this respect. I already told you that, at the end of the year, depending of course on ultimate adjustment, but we will boast average inflation over the first 12 years of the euro at a level which would be below 2%, close to 2%, so exactly in line with the definition of price stability we gave, I would say, 12 years ago. This is a remarkable results, not only because we did what we had said we would do and you know in this domain, as in all others, what counts are facts and figures and demonstrated capacity to ensure price stability . It's also remarkable because, with this record, we would be in a better price stability situation than has been observed in any particular country in the euro area in the '90s or in the '80s, not to speak of the '70s, which everybody knows was a period of very high inflation . So this is a remarkable demonstration of our inflexible attachment to price stability in the euro area. And when we had to cope with the start of the financial crisis in '07 and '08, you remember that we always had a sense of direction . We had a sense of direction . We took a number of nonconventional measures, which never hampered the anchoring of inflation expectations. It is what we do now and we will continue to do that. I have to say with great determination.
COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.