Sunday, August 8, 2010

UPDATE 1-ECBs Trichet:Euro section states contingency be some-more obliged

Thu Mar 25, 2010 1:41pm EDT Related News REFILE-ECB"s Trichet:Euro zone states must be more responsible1:24pm EDT

* Trichet says euro zone members must be more responsible

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* Euro zone states must closely follow Maastricht treaty

* IMF, other bodies must not assume responsibilities

(Adds details, background)

PARIS, March 25 (Reuters) - The International Monetary Fundor any other body must not assume the responsibilities of eurozone governments in dealing with economic problems, EuropeanCentral Bank President Jean-Claude Trichet said on Thursday.

Speaking to French Public Senat television, Trichet saidthat members of the 16-nation euro zone needed to remainfaithful to responsibilities laid out in the Maastricht Treaty,which incorporates stability and growth goals.

"Everything going in the direction of euro zone membersshying away from responsibilities is bad in our eyes," he said.

"If the IMF or some other body exercises the responsibilityin lieu of the Eurogroup or instead of governments, it isevidently very, very bad," he said.

EU leaders are hoping to reach consensus on a financialsafety net for Greece on strict German conditions at a keysummit on Thursday night [ID:nLDE62N2R1].

After weeks of public divisions over whether and how to helpGreece, Merkel signalled she would accept a contingency rescueplan provided the International Monetary Fund is involved and EUpartners agree to toughen the bloc"s budget deficit rules.

Some euro zone states, notably France, and ECB policymakershave previously opposed an IMF role, arguing such a move wouldunderscore the single currency area"s inability to solve thedeepest crisis in its 11-year existence on its own.

Europe was currently paying the very price for not takingits responsibilities seriously enough, Trichet said.

Euro zone governments should have been far more stringent inwatching over stability and growth goals given that they share acommon currency and goals, he said.

"The crux of our positions is that euro zone governmentsmust not relinquish an inch of their current responsibility. Onthe contrary, they must be far more responsible still," he said.

Trichet pointed to Greece as an example of a country thathad shown negligence on budget issues.

"We see the result of past negligence. This said, it wasnegligence on the part of surveillance and also negligence onthe part of the Greeks," he said.

"The Greeks provided wrong figures, something that isabsolutely unforgivable and must never be repeated," he added.(Reporting by Julien Toyer; Writing by Tamora Vidaillet;Editing by Ron Askew)

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