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.

Sport
David Moyes and Louis van Gaal
football
Sport
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
rugby
News
Liam Payne has attacked the media for reporting his tweet of support to Willie Robertson and the subsequent backlash from fans
peopleBut One Direction star insists he is not homophobic
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvSeries 5 opening episode attracts lowest ratings since drama began
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
News
Jacqueline Bisset has claimed that young women today are obsessed with being 'hot', rather than 'charming', 'romantic' or 'beautiful'
people
Sport
Greg Dyke insists he will not resign as Football Association chairman after receiving a watch worth more than £16,000 but has called for an end to the culture of gifts being given to football officials
football
Life and Style
A new app has been launched that enables people to have a cuddle from a stranger
techNew app offers 'PG alternative' to dating services like Tinder
News
people
Arts and Entertainment
Jake Quickenden sings his heart out in his second audition
tvX Factor: How did the Jakes - and Charlie Martinez - fare?
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

Quantitative Risk Manager

Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...

COO / Chief Operating Officer

£80 - 100k + Bonus: Guru Careers: A COO / Chief Operating Officer is needed to...

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

Day In a Page

A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments