European Central Bank president Jean-Claude Trichet gave his traditional post interest-rate decision press conference on Thursday in interesting circumstances.
While rates were left unchanged, Trichet spoke amid record plunges for Greek bonds in the markets — and in advance of a new haircut policy which may help Greece.
Naturally, he was asked about whether Greece should seek help from the European Union or the International Monetary Fund. As transcribed by FT Alphaville, here are his key comments.
On the prospect of European — or IMF — financial support:
OUR POSITION HAS ALWAYS BEEN THAT WE WANTED EURO AREA GOVERNMENTS TO MEET RESPONSIBILITIES
NOT A QUESTION OF REFUSING THE IMF BUT HAVING THE GOVERNMENT UP TO THE RESPONSIBILITY
On European leaders’ previous statement of support for Greece:
I CONSIDER IT IS A WORKABLE STATEMENT, PRECISELY IN CASE IT IS NEEDED WOULD HAVE PRECISELY THE KIND OF JOINT EFFORTS WHICH ARE NOT AT ALL SUBSIDIES, WHICH ARE LOANS THAT WOULD NOT BE WITH AN ELEMENT OF SUBSIDISATION, WHICH WOULD PERMIT WITH THE APPROPRIATE KIND OF CONDITIONALITY TO HELP
NOBODY SHOULD TAKE LIGHTLY A STATEMENT THAT IS SIGNED BY ALL HEADS OF THE EURO AREA – I TAKE IT AS A VERY SERIOUS COMMITMENT
And on Greece’s plan to achieve credibility through fiscal austerity:
THAT BEING SAID, WHAT IS ALSO VERY IMPORTANT IS THAT THE PROGRAMME WITH THE NEW MEASURES IS IMPLEMENTED RIGOUROUSLY – THAT IS KEY
AND I HAVE NO REASON TO BELIEVE IT HAS NOT BEEN IMPLEMENTED RIGOURSLY – BUT WE REMAIN ON ALERT
To sum up:
IN THE PRESS COMMUNIQUE YOU WILL SEE IN A FEW MINUTES THERE WILL BE NO CHANGE TO HAIRCUTS RATED ABOVE BBB
GREECE REPRESENTS 2.5 PER CENT OF THE GDP OF THE EURO AREA – WHAT THEY HAVE AGREED UPON IS VERY IMPORTANT
TAKING ALL THE INFORMATION I HAVE DEFAULT IS NOT AN ISSUE FOR GREECE
Oh, and just to be clear:
I NEVER SAID THAT WE DID NOT WANT THE IMF: I SAID WE DID NOT WANT THE IMF ALONE
In case anyone was wondering.