Trichet defends ECB independence

 

Jean-Claude Trichet insisted to European parliamentarians yesterday that the European Central Bank remains fully independent of national governments, despite the Bank's emergency purchase of Spanish and Italian sovereign bonds earlier this month. The ECB's President pointed out that the Bank has only bought bonds in the secondary market (rather than directly from governments) and called for all eurozone states to show "strict respect" for budgetary discipline in exchange for such market assistance.

Mr Trichet said he expected a "modest pace" of eurozone growth and for inflation to remain above 2 per cent in the coming months. He also warned members of the European Parliament's key economics committee that economic uncertainty remained "particularly high".

Mr Trichet was addressing the European Parliament just one day after a public disagreement with the new head of the International Monetary Fund, Christine Lagarde, at an annual meeting of central bankers in Jackson Hole, Wyoming. On Sunday, Ms Lagarde issued a surprise call for an "urgent" recapitalisation of Europe's weakest banks. Mr Trichet countered that any suggestion that Europe faces a liquidity problem was "plain wrong". Other European officials, who have been struggling to convince financial markets that Europe's banks are already adequately capitalised, called Ms Lagarde's remarks "misguided".

The ECB's purchases of 10-year Italian and Spanish sovereign bonds since 8 August have succeeded in driving down the interest rates of those two nations to tolerable levels.

But many fear that those rates could rise again unless growth on the eurozone periphery recovers. Uncertainty also remains about whether the rescue package agreed by eurozone leaders on 21 July in Brussels will be delivered. National parliaments have yet to ratify the deal to award Greece further emergency lending of €109bn and to allow the European Financial Stability Facility to support Spain and Italy by buying their bonds.

Germany's deputy foreign minister, Werner Hoyer, warned the Finnish government yesterday not to "rock the boat" by demanding that Greece post collateral in return for Helsinki contributing to the latest stage of the Greek bailout. If other governments insist on similar conditions the deal could unravel.

Two of Greece's largest banks, Alpha and Eurobank, announced yesterday they will merge as officials try to shore up that nation's fragile financial sector.

PROMOTED VIDEO
News
i100(More than you think)
Arts and Entertainment
John Hurt will voice Prince Bolkonsky in Radio 4's War and Peace
radioRadio 4 to broadcast 10-hour adaptation of War and Peace on first day of 2015
News
i100
News
people
Arts and Entertainment
Avatar grossed $2.8bn at the box office after its release in 2009
filmJames Cameron is excited
News
ebooksNow available in paperback
News
news

Lincoln MP Karl McCartney 'denied all knowledge' of the Twitter activity

Arts and Entertainment
Joel Edgerton, John Turturro and Christian Bale in Exodus: Gods and Kings
filmDirector said film would 'never have been financed' with ethnic minority actors in key roles
Arts and Entertainment
Stik on the crane as he completed the mural
art
News
The author PD James, who died on 27 November 2014
people

Detective novelist who wrote Death comes to Pemberley passed away peacefully at her home, aged 94

Arts and Entertainment
Jennifer Lawrence as Katniss Everdeen in The Hunger Games: Mockingjay Part 1
arts + ents
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Argyll Scott International: Service Desk Analyst

£20000 - £22000 per annum: Argyll Scott International: Service Desk Analyst Re...

Argyll Scott International: 2x Service Desk Analyst

£20000 - £22000 per annum: Argyll Scott International: Service Desk Analyst Re...

Recruitment Genius: Senior Execution Trader

£30000 - £250000 per annum: Recruitment Genius: A global Rolling Spot FX, Comm...

Citifocus Ltd: ACA - Financial Reporting

£Attractive Package: Citifocus Ltd: Chartered accountant (ACA or CPA), must be...

Day In a Page

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game
There's a Good Girl exhibition: How female creatives are changing the way women are portrayed in advertising

In pictures: There's a Good Girl exhibition

The new exhibition reveals how female creatives are changing the way women are portrayed in advertising
UK firm Biscuiteers is giving cookies a makeover - from advent calendars to doll's houses

UK firm Biscuiteers is giving cookies a makeover

It worked with cupcakes, doughnuts and macarons so no wonder someone decided to revamp the humble biscuit
Can SkySaga capture the Minecraft magic?

Can SkySaga capture the Minecraft magic?

It's no surprise that the building game born in Sweden in 2009 and now played by millions, has imitators keen to construct their own mega money-spinner
The King's School is way ahead of the pack when it comes to using the latest classroom technology

Staying connected: The King's School

The school in Cambridgeshire is ahead of the pack when it comes to using the latest classroom technology. Richard Garner discovers how teachers and pupils stay connected
Christmas 2014: 23 best women's perfumes

Festively fragrant: the best women's perfumes

Give a loved one a luxe fragrance this year or treat yourself to a sensual pick-me-up
Arsenal vs Borussia Dortmund: Alex Oxlade-Chamberlain celebrates century with trademark display of speed and intuition

Arsenal vs Borussia Dortmund

The Ox celebrates century with trademark display of speed and intuition
Billy Joe Saunders vs Chris Eubank Jnr: When two worlds collide

When two worlds collide

Traveller Billy Joe Saunders did not have a pampered public-school upbringing - unlike Saturday’s opponent Chris Eubank Jnr
Homeless Veterans Christmas Appeal: Drifting and forgotten - turning lives around for ex-soldiers

Homeless Veterans Christmas Appeal: Turning lives around for ex-soldiers

Our partner charities help veterans on the brink – and get them back on their feet
Putin’s far-right ambition: Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU

Putin’s far-right ambition

Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU
Tove Jansson's Moominland: What was the inspiration for Finland's most famous family?

Escape to Moominland

What was the inspiration for Finland's most famous family?