Monday 19 March 2018

Call for the EU to unite against US in IMF talks

Jean-Claude Trichet: urging
coherent stance by members. Photo: Bloomberg News
Jean-Claude Trichet: urging coherent stance by members. Photo: Bloomberg News

EUROPEAN Central Bank president Jean-Claude Trichet urged European Union countries to find a unified position over US threats to the EU's influence at the International Monetary Fund (IMF).

Mr Trichet's comments at a conference in Cernobbio, on the shore of Lake Como near Milan, follow a stand-off over Europe's strong presence on the IMF board, with the US pressing for more power for emerging countries.

The US rejected a proposal last month to maintain the IMF's executive board in its current form, a decision which may force EU countries, including Belgium and The Netherlands, to reduce their number of seats.


"On a personal basis I would urge the Europeans to at least reach a joint position, a united position," Mr Trichet said at a press conference over the weekend. "Improvement in the way the IMF is managed is an essential part of the global governance," he added.

In an interview with CNBC TV on the sidelines of the Cernobbio meeting, Mr Trichet repeated remarks he made last week after the ECB left its main interest rate unchanged at 1pc following a meeting of the governing council.

"The ECB has delivered price stability; now it is up to the national governments to deal with competitiveness issues," he said, noting that the economy had shown more positive signs over the past weeks.

"The probability of a double-dip recession has decreased," he said. "We can't say we have won; we have to be cautious to restore confidence."

The banker also repeated the ECB's long-standing line ruling out the possibility of Greece leaving the eurozone as a result of its debt crisis, saying a return to the drachma would be the worst option for Athens.

He said the bloc's stability pact had to be strengthened as much as possible using "secondary legislation" because it would not be possible to change the treaty that created it.

He dismissed any suggestion that the euro needed to rival the US dollar as a world currency.

"We created the euro to achieve the single market, for the prosperity and stability of Europe," he said. "We did not create euro to compete with the US dollar."

Irish Independent

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