ECB Trichet: European Economic Growth To Remain Modest In 2010
PARIS (Dow Jones)--Although Europe is exiting the economic crisis, its growth will only be modest this year, the head of the European Central Banks said Saturday.
In an interview with French television, ECB President Jean-Claude Trichet warned, however, that high debt levels built by governments to pull their economies out of recession aren't sustainable in the long term. He said policy makers must win the confidence of the public in order to generate lasting economic growth.
When asked about prospects the ECB will raise interest rates as soon as it feels inflationary tendencies are rising, Trichet said, "We will do whatever is necessary to give all our citizens...price stability." But he quickly added that nothing he had just said should be interpreted as indicating the policy decision to be taken by the ECB's Governing Council at its regular meeting next week. He noted that he's in a blackout period in which he can't talk about the meeting.
A strong dollar is also key for the global economy, Trichet said. A strong dollar against the major convertible and floating currencies is good for the U.S., good for Europe, and good for the international economy as a whole, he noted. He also said he's received assurance from U.S. policy makers that they're earnest about their desire for a strong dollar.
Responding to a question, Trichet rejected the idea that the dollar is reinforced by a weakening euro. Europe's single currency has softened against the dollar in recent weeks. That decline has come as European policy makers, led by the French, have been decrying the euro's relative strength against the dollar and the Chinese yuan.
Trichet reiterated the ECB 's approval of measures taken by the Greek government to tackle the country's deep fiscal crisis, expressing confidence in the government's actions.
By A.H. Mooradian, Dow Jones Newswires; +33 1 4017 1740; art.mooradian@dowjones.com. |
