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ECB president is 'confident' we can avoid Greece's fate

Leader weighs in behind Bruton's plan for wage reform and calls for 'flexibility and structural reforms' of Irish economy

Laura Noonan , in Frankfurt

Published 10/06/2011 | 05:00

'I have to say
that what I see
from Ireland
gives
confidence of
the capacity
of the country
to go in the
right
direction' -
Trichet
'I have to say that what I see from Ireland gives confidence of the capacity of the country to go in the right direction' - Trichet

RECENT events give "confidence" that Ireland has "the capacity to go in the right direction" and avoid a Greece-style markets crisis, European Central Bank president Jean Claude Trichet said yesterday.

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The ECB boss stressed that the difficulties encountered in Greece should not be taken as a sign that Ireland's bailout programme will also run aground.

"It (the success of a programme) depends very much on the country itself," he said.

"The countries concerned have an immense responsibility to cope with their own problems and demonstrate as clearly as possible to all partners that it (the programme) works.

"I have to say that what I see from Ireland gives confidence of the capacity of the country to go in the right direction."

In what may be considered a boost for Enterprise and Jobs Minister Richard Bruton's efforts to reduce wages agreements in key sectors of the economy, Mr Trichet hinted that he supported a move towards reform, saying everything that "goes in the direction of flexibility and structural reforms" is "good".

"In that respect, Ireland has the benefit of an economy which seems perhaps to be more flexible than others."

Mr Trichet failed to definitively say that Ireland would return to the bond markets in 2012, as envisioned by the plan, but he implied that recent statements by Transport Minister Leo Varadkar suggesting that this was unlikely to happen were unhelpful.

"On delicate matters it is good to be cautious and prudent," he said. "Verbal discipline is appropriate in the present circumstances, speaking on the euro area as a whole."

The comments came as the ECB reiterated its staunch opposition to a mooted restructuring of Greece's sovereign debt that would help the embattled country cope if it can't raise money from the markets next year.

Markets

German finance minister Wolfgang Schaeuble wrote to Mr Trichet earlier in the week suggesting a programme that would see private holders Greek debt agree to wait an extra seven years for repayment.

"We are not in favour of restructuring and so forth," Mr Trichet told reporters yesterday, adding: "We would exclude all concepts which would not be purely voluntary or without any elements of compulsion."

The ECB boss pointedly declined to endorse a voluntary restructuring of Greek debt.

Asked if the ECB, as a holder of Greek bonds, would take part in such a voluntary offer, Mr Trichet replied: "That is certainly not our intention."

Asked about Mr Schaeuble's intervention, which was also sent to the European Commission and the International Monetary Fund, Mr Trichet stressed that he dealt with leaders of 17 countries.

"I am not embarking in a dialogue with a particular minister," he added.

Yesterday's meeting of ECB's governing council also formally endorsed Italian Mario Draghi as the candidate who will take over from Mr Trichet when he steps down in the autumn.

Mr Trichet yesterday described Mr Draghi as being a "person of recognised standing and professional experience in monetary and banking matters".

Irish Independent

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