Jean-Claude Trichet

Related: Otmar Issing - Tyskland - Frankrike - Stabilitetspakten - Finanskrisen - Euron

"For a small, open economy like Cyprus, Euro adoption provides protection from international financial turmoil."
18/01/2008, Trichet

Source: BIS, Basel

Jean-Claude Trichet - president of the European Central Bank during many of the euro's formative years - made a similar point.
"In a single market with a single currency… it seems to me that Europe could go for a federation."
Robert Peston, BBC Business editor, 17 May 2012

This was not what was supposed to happen
Krugman om Trichet och åtstramning som ger tillväxt
New York Times, 11 mars via Rolf Englund blog

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In defence of Chevalier Trichet
We have been called upon by the democracies of Europe to deliver price stability,
and we have delivered price stability, impeccably.
Ambrose Evans-Pritchard, 8 September 2011

When Jean-Claude Trichet retires on Oct. 31, the euro area may lose more than just a European Central Bank president. Trichet has emerged as Europe’s key policy maker during the sovereign debt crisis, holding the 12-year-old monetary union together as heads of state squabble over their response. While ECB officials have sometimes split over the direction, under Trichet the central bank shown itself more willing and able to act than the bloc’s 17 finance ministers and government leaders.
“Trichet has become the de facto president of Europe,” said Marco Valli, chief European economist at UniCredit Global Research in Milan. “He is the only one who’s delivered the leadership necessary during this crisis.”

Aug 9, 2011

I have explained in detail to the Heads of State and Government and to the finance ministers,
on several occasions, that, if a country defaults,
we will no longer be able to accept its defaulted government bonds as normal eligible collateral.


“There is no crisis of the euro,” Mr Trichet declared
Speaking in Aachen, Germany, Mr Trichet called for a European Union that would be
“a confederation of sovereign states of an entirely new type”.

FT 2nd June 2011

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Commonwealth of Independent States

He also favors giving the European Union powers to veto the budget measures of countries
Trichet said governments should consider setting up a finance ministry for the 17-nation euro region
“Would it be too bold, in the economic field, with a single market, a single currency and a single central bank, to envisage a ministry of finance of the union?”
Trichet said in a speech today in Aachen, Germany.
Bloomberg 2 june 2011

Trichet, Karl den Store och Göran Persson hos SNS
Rolf Englund blog 2 juni 2011

Our economies are emerging from the worst economic crisis since the second world war, and without the swift and appropriate action of central banks and a very significant contribution from fiscal policies, we would have experienced a major depression.
Now is the time to restore fiscal sustainability.
But the timing remains disputed.
Jean-Claude Trichet, FT July 22 2010

Europa befinner sig i den värsta situationen sedan andra världskriget,
kanske till och med sedan första världskriget.
Det säger chefen för den Europeiska centralbanken Jean-Claude Trichet
Ekot 16 maj 2010


Jean-Claude Trichet tells us the world faced a second Lehman crash in the days and hours before EU leaders launched their €720bn defence fund.
If the European Central Bank’s president is correct, we are in trouble.
The EU-IMF package is already unravelling. What will the West do for its next trick?
Ambrose Evans-Pritchard 16 May 2010

Jean-Claude Trichet is upping his war against the European Council when he decried yesterday’s Ecofin agreement as poor and insufficient.
Eurointelligence 16/3 2011

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Frankfurter Allgemeine’s Holger Stelzner,
its economics editor and probably the most influential conservative economic commentator in Germany,
writes the ECB has turned into a political agency, and it has turned into EBB – a European Bad Bank
Eurointelligence 16 august 2011

He calculates that the ECB will amass about €300bn of government securities by the end of September.

Der Niedergang der Europäischen Zentralbank


The European Central Bank spent €22bn on government bonds last week
It brought the total amount of eurozone government bonds on the ECB’s books to €96bn
FT 16 August 2011

Some analysts have worried that because of the size of Italy’s and Spain’s bond markets – totalling €2,100bn - the ECB could have difficulties in sterilising all its purchases if it has to carry on buying on such a large scale.

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There may come a moment when the ECB decides that enough of its balance sheet is invested in Spanish and Italian public-sector debt.
Robert Peston, BBC Business editor, 16 August 2011

Its current buying rate of £4.4bn of eurozone government bonds per day is equivalent to an annual buying rate of more than one trillion euros

How long before the ECB's exposure to potential credit losses on sovereign loans of questionable quality becomes embarrassingly large?

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French economist Jacques Delpla, who co-authored a paper proposing how eurobonds could work,
said the euro faced collapse unless leaders went beyond an agreement reached July 21
"If we just stick to the July 21 agreement then, before the end of the year,
there will be no euro zone, unless the ECB buys everything that's problematic."
CNBC 16 August 2011

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444 miljarder euro - ECB: "bara 75 miljarder euro"
”ECB har samlat på sig en hel del dåliga papper med dålig säkerhet. Banken har så pass stor exponering mot svagare länder att man inte själv skulle klara av stora nedskrivningar av lånen”,
säger Mats Persson, chef på den liberala tankesmedjan Open Europe.
DI 17 juni 2011

Han gör bedömningen att ECB, genom sitt stöd till krisdrabbade euroländer som Grekland, Irland och Portugal samt svaga banker, har samlat på sig hela 444 miljarder euro, motsvarande 4 biljoner kronor, i mer eller mindre riskfyllda tillgångar. Enbart exponeringen mot grekiska obligationer och banker tror man ligger kring 190 miljarder euro, motsvarande 1.700 miljarder kronor.

På ECBs pressavdelning menar man att Mats Perssons påståenden inte stämmer. Man vill inte säga hur mycket av varje lands statspapper man har köpt på sig men totalt handlar det enligt ECB bara om 75 miljarder euro.

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The bank is now "23 to 24 times levered" as a result of bailing out Greece, Ireland, Portugal and Spain.
Open Europe, 6 June 2011

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For all Germany’s fear of becoming locked into permanent support for the Irish and others,
the irony is that it is already providing involuntary ‘bailouts’ via the eurosystem that carry similar risks.
In the Irish case, this is both larger than the EFSF bailout , €146bn as against €67bn,
and much cheaper, 1% interest as against 5.8 %.
John Whittaker, Eurointelligence 7/4 2011

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Mycket fiffigt
European Central Bank Wants to Unload PIIGS Bonds
Merkel's conservative Christian Democratic Union (CDU) party's group in parliament is strictly opposed to the purchase of state bonds through the EFSF,
but neither Merkel nor Schäuble feels bound in their vote in Brussels to the parliamentary group's position.
Opposed to the direct purchase of bonds by the EFSF, but they are not opposed to troubled countries taking loans from the rescue fund in order to buy back their own bonds from the market.
Der Spiegel 4/3 2011

Germany, Finland and the Netherlands are blocking proposals to increase the scope of the EFSF to include bond purchases, or to fund any effective bond bond repurchase programmes.
The article says the development was a setback for the ECB, which had hoped that the EFSF could buy part of the ECB’s own peripheral bond portfolio, which it amassed as part of its securities market programme. The article says that Germany was ready to increase the package from a nominal to a real €440bn (but what’s is the point of that without bond purchases?).
Eurointelligence 7/3 2011

The ECB's governors might usefully study
Systematic Monetary Policy and the Effects of Oil Price Shocks, a seminal work in 1997 by a Professor Ben Bernanke of Princeton.
The reason why such shocks often lead to slumps is because policymakers make a hash of it.
Ambrose Evans-Pritchard 7 March 2011

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ECB Expresses `Serious Concerns' About Irish Proposals to Stabilize Banks
Bloomberg 20/12 2010

“The ECB has serious concerns that the draft law is insufficiently legally certain,” the central bank said in a position paper dated Dec. 17, published on its website.

The ECB said in the paper, signed by President Jean-Claude Trichet, that it would have “appreciated being consulted” at “an earlier stage” and that it expects the Irish government to “take any additional measures necessary to reflect the ECB’s opinion to the extent appropriate.”

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Mechanics of a European capital flight
$107bn outflow from Greece, Ireland, Portugal and Spain in Q2
FT Alphaville Dec 13 2010

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In its financial stability report, the ECB warned that some banks are overreliant on ECB funds.
9 December 2010 - Financial Stability Review December 2010

Although for the present, banks and sovereigns can turn to the European Central Bank for funding, the ECB is wary of being drawn into providing fiscal transfers through the back door (by buying sovereign and bank debt which will in time be written down).
Sir John Gieve, Daily Telegraph 7 December 2010

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Only Trichet can save us now – ECB about to monetise peripheral debt
The second problem is that a large purchasing programme of the kind demanded by analysis
is almost certainly a breach of European law, and German constitutional law.

Eurointelligence, 2 December 2010

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According to EU officials,
Mr Trichet told the summit that signalling to markets that private investors would be more at risk in restructurings could spook the bond market, driving up interest rates for countries such as Ireland and Greece.
The EU officials said Mr Trichet’s warning was met with bitterness by Nicolas Sarkozy, who complained he did not understand the challenges facing heads of state.
FT 29/10 2010

“The president of the European Central Bank looks at doing everything to calm the markets,” Ms Merkel said.
“We support him on this, but we also look at our people and their very legitimate belief they should not bear the cost.”

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Angela Merkel insisterade på att en begränsad ändring är nödvändig
för att landets författningsdomstol inte ska stoppa Tyskland
från att vara en del i det skyddsnät som ska ersätta den tillfälliga räddningsfond som inrättades efter eurokrisen i våras.
SvD Näringsliv 29 oktober 2010

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French and the Germans have once again been discussing whether /Stability Pact/ sanctions should be automatic or not.
For Jean-Claude Trichet to issue an official note of disagreement – after European Union finance ministers last week drafted a watered-down sanctions package – is extraordinary
Wolfgang Münchau, FT 25/10 2010

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ECB loans to banks down to 514 billion euros (USD 716 billion),
the least since Lehman Brothers Holdings Inc.’s collapse in September 2008,
Greek, Irish and Spanish banks took 61 percent of the loans supplied
Bloomberg Oct 29, 2010

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ECB Buying Up Greek Bonds
German Central Bankers Suspect French Conspiracy
gives French banks the perfect opportunity to get rid of their Greek assets
Der Spiegel 31 May 2010

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Our economies are emerging from the worst economic crisis since the second world war, and without the swift and appropriate action of central banks and a very significant contribution from fiscal policies, we would have experienced a major depression.
Now is the time to restore fiscal sustainability.
But the timing remains disputed.
Jean-Claude Trichet, FT July 22 2010

The growth of public debt has been driven by three phenomena:
a dramatic diminishing of tax receipts due to the recession;
an increase in spending, including a pro-active stimulus to combat the recession;
and additional measures to prevent the collapse of the financial sector.

In extraordinary times, the economy may be close to non-linear phenomena such as a rapid deterioration of confidence among broad constituencies of households, enterprises, savers and investors.
My understanding is that an overwhelming majority of industrial countries are now in those uncharted waters, where confidence is potentially at stake.

Had our public finances not been credible when that 27 per cent of GDP of taxpayer risk was mobilised, we would not have avoided a financial meltdown and a second Great Depression.

In the extraordinary circumstances we have experienced since 2007, central banks across the Atlantic, the Channel, the Pacific and all over the world have demonstrated a remarkable capacity to analyse unprecedented situations and take appropriate decisions.

The ECB, which acted at the very start of the financial turmoil on August 9 2007, will contribute to consolidate a confident economic environment by ensuring price stability in the euro area

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What lessons does history have to teach us about Jean-Claude Trichet’s call for immediate, rapid, and substantial fiscal and monetary retrenchment and austerity
- his full-throated endorsement of the agenda of the Pain Caucus?
Brad DeLong, FT July 23 2010 (excerpts)

And times when irrational exuberance on the part of foreign investors leads a country’s public or private sector to borrow heavily in foreign currency, it needs to pre-emptively retrench before foreign investor exuberance wears off, or else--as happened to East Asia in 1997-8, to Mexico in 1994-5, or to Argentina innumerable times since 1890

None of the core economies of the Global North--not France and Germany which are the heart of Eurozone, not Britain, not the United States, and not Japan--are in any of these three positions right now.

What else does history tell us? It tells us that in 1925 Chancellor of the Exchequer Winston Churchill was ill-served when he rejected the arguments of John Maynard Keynes and accepted the arguments of his Treasury staff that Britain required retrenchment and austerity: Churchill thus gave Britain a three-year head start on suffering from the Great Depression.

It teaches us that Weimar German SPD leader Rudolf Hilferding was extremely ill-advised to commit the SPD to policies of retrenchment and austerity when his labour economist Wladimir Woytinsky was calling for the SPD to develop a plan for a New Deal for Germany.

And it teaches us that in his memoirs U.S. President Herbert Hoover, who was bitter about many things, was bitterest that he had let Treasury Secretary Andrew Mellon hamstring Hoover’s progressive impulses and lead the Hoover administration to policies of retrenchment and austerity.

Jean-Claude Trichet seems to me to place himself in the position of, as British interwar bureaucrat R.G. Hawtrey described his precedessors at the start of the Great Depression, somebody: “crying ‘Fire! Fire!’ in Noah’s flood.”

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The great austerity debate

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The ECB was part of the shock-and-awe package of policy steps announced last month to arrest the very real risk of a debt-deflationary spiral in Europe.
The ECB is buying government bonds of troubled members of the monetary union, taking on their credit risk, paying for them with newly created money.
So it is ineluctably the case that the ECB has ventured into the fiscal policy realm, de facto monetising the debt of the troubled members.
If there is any doubt about that, the fact that the Bundesbank opposed the action should end that doubt. It was and is what it was and is, and the Bundesbank’s objection speaks directly to that reality.
Paul McCulley June 2010

The threat that Portugal and Spain might be cut off from credit markets,
triggering a meltdown in Europe’s financial system, was all too real.
The euro zone’s rescue scheme is big and bold but leaves the ECB looking compromised
The Economist online May 11th 2010

However, for all his protestations, the ECB looks a different animal to when the fiscal crisis began.
Having balked at buying government bonds last year when other central banks were doing so as part of their monetary policy, the bank now finds itself involved in an explicit support operation to European governments' fiscal policies—which is a far bigger threat to its self-image.
This is not the only sharp U-turn Mr Trichet has had to perform in recent weeks. He opposed IMF involvement in the Greek rescue, then welcomed it.
And he said the rules would not be changed to suit one country, only to change them to ensure that Greek bonds could be exchanged by banks for ECB cash.

The central bank's credibility relies in part on a reputation for living up to its pledges and partly on its disdain for political expediency.
On both counts, then, it has lost something.

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Så här i efterhand kan man säga att det var en fördel att det inte uppfattades som så allvarligt som det faktiskt var,
sade finansminister Anders Borg om hur pressad situationen var på finansmarknaderna förra veckan.
ekot 10 maj 2010

The second, more worrying step is a European Central Bank decision to buy government bonds “to address... malfunctioning... securities markets”.
With this it caved in to pressure from eurozone sovereigns not to tolerate a bond strike against one of their number.
Financial Times editorial May 10 2010 20:41

Liquidity does not equal solvency: buying vulnerable states time to rein in shaky finances does not by itself cut deficits or stabilise debts. Their willingness to push the painful process through remains unproven.

That the package was prompted by a market rout, moreover, makes it a European “Greenspan put”. It entrenches moral hazard not just for sovereign borrowers but for a banking sector which, unless radically reformed, will learn to rely on taxpayers coming to the rescue.

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Banks dump Greek debt on the ECB
Foreign holders of Greek and Portuguese debt have seized on emergency intervention by the European Central Bank to exit their positions, leaving eurozone taxpayers exposed to the credit risk.
Ambrose Evans-Pritchard, 17 May 2010

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The two German members of the ECB's council voted against the move
The European Central Bank risks irreparable damage to its reputation by agreeing to the mass purchases of southern European bonds in defiance of the German Bundesbank and apparently under orders from EU leaders.
Ambrose Evans-Pritchard 11 May 2010

Jean-Claude Trichet, the ECB's president, denied there had been any political interference. "We are fiercely and totally independent," he said.

It is clear, however, that the two German members of the ECB's council voted against the move, a revelation that may cause a catastrophic political backlash in Germany.

Axel Weber, ultra-hawkish head of the Bundesbank, told Boersen-Zeitung that the emergency move over the weekend had been a mistake.

"The purchase of government bonds poses significant stability risks and that's why I'm critical of this part of the ECB's council's decision, even in this extraordinary situation," he said.

The rebuke is devastating. The ECB draws it authority from the legacy and aura of the Bundesbank.

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Having announced that interest rates would remain at 1%, ECB president Jean-Claude
Trichet said that restarting a programme to buy up government debt had not been considered.
BBC 6 May 2010

In view of the current exceptional circumstances prevailing in the market, the Governing Council decided:
To conduct interventions in the euro area public and private debt securities markets (Securities Markets Programme) to ensure depth and liquidity in those market segments which are dysfunctional.
ECB 10 May 2010

Jean-Claude Trichet, the ECB's president, said the bank's governing council had not even talked about a possible purchase of eurozone government deb
Gabriel Stein from Lombard Street Research called Mr Trichet's remarks "embarrassingly meaningless" and said it was hard to believe that the ECB had not discussed a move to quantitative easing.
Ambrose Evans-Pritchard, 6 May 2010

"Either the governing council is guilty of gross dereliction of duty, or the ECB is treating journalists and analysts as ignorant children," he said, echoing a view widely held in Europe's financial centres.

German Chancellor Angela Merkel accused the financial industry of playing dirty. "First the banks failed, forcing states to carry out rescue operations. They plunged the global economy over the precipice and we had to launch recovery packages, which increased our debts, and now they are speculating against these debts. That is very treacherous," she said. "Governments must regain supremacy. It is a fight against the markets and I am determined to win this fight".

Italy holds the world's third-largest stock of debt after Japan and the US at €1.76 trillion so any hint of credit problems has global ramifications. While the country has weathered the credit crisis remarkably well so far, it seems unable to pull itself out of near perma-slump.

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Quantitative easing

Quantitative Easing Explained
Bank of England

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Ett av de vanligaste och kraftigaste argumenten mot europrojektet har just varit att det är svårt och närmast omöjligt att hålla en räntenivå som passar alla.
En given nivå på styrräntan verka stimulerande på en redan het ekonomi med inflation över genomsnittet och
nedkylande på en redan kall ekonomi, som har en inflation under genomsnittet.
Att hålla koll på denna inbyggda och uppenbara brist i systemet och hur den driver kreditutvecklingen borde ha varit prio-1 för ECB. Men ECB har haft så kallad nollkoll.
E24:s börskrönikör Per Lindvall, 6/5 2010

France and Germany agreed to bring in the International Monetary Fund to help aid debt-stricken Greece in the face of opposition from the European Central Bank.
Bloomberg March 25 2010

Whether he likes it or not, Jean-Claude Trichet is not just the president of the European Central Bank.
Mr. Trichet, 67, is also the de facto president of Europe,
at least for the 16 nations that rely on the euro as their common currency.
Jack Ewing. The New York Times, 8 February 2010.

Mr. Trichet delivers such comments in excellent English with a distinct French accent. Though he can be stern, he sometimes displays a dry sense of humor. Before the G-7 meeting on Saturday, he joked that by gathering in frozen Canadian territory, “we will have just the right environment to be as cool as possible in judging the situation.”

Mr. Trichet sometimes maintains that problems with individual euro nations should be of no greater concern to Europe’s central bank than the fiscal problems of an individual state are to the Federal Reserve in Washington. After being peppered with questions about Greece on Thursday, Mr. Trichet responded: “I doubt that, in a press conference, Ben Bernanke would have a question on Alaska or Massachusetts.”

“The ultimate problem is the nonexistence of a political union,” said Mr. Krämer, the Commerzbank economist. “This is the big, big reason behind all the problems we are talking about.”

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Jag tror ingen egentligen har tänkt igenom det här ordentligt. Ja, de som är federalister har gjort det, och de har gjort det lätt för sig, naturligtvis. De vill ha ett Europas förenta stater med direktvalt organ och alltihop, det är enkelt.
Men vi är inte federalister i Sverige, vi är för en europeisk union som vi vill skall bli större, men vi vill inte ha en federation.
Göran Persson

Logiken i det hela rör sig i federativ riktning... Sch! säger Kohl åt mig när jag tar upp det.
Då bör svenska folket också ha det klart för sig innan vi röstar om medlemskap. Att komma fem-tio år efteråt och upptäcka att vi plötsligt har gått med i någonting som successivt beövar oss vår nationella bestämmanderätt, det skulle vara att sätta sig i en trettio år lång svekdebatt vad det gäller demokratin.
Det vill jag inte göra.
Göran Persson 1997-10-13, Fichtelius, sid. 391

State of The Union
Rolf Englund, Internet 20/1 2003

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Det är målsättningen om ett ständigt fastare förbund - "ever closer union" - som är själva grundbultsfelet med EU.
Kunde vi rulla tillbaka Sovjetunionen skall vi väl kunna rulla tillbaka Europeiska Unionen.
Rolf Englund Barometerns website 7/6 2005

Rolf Englund

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President Nicolas Sarkozy is drawing up plans to boost the political accountability of the European Central Bank
Mr Sarkozy wants the ECB to publish regular minutes of the meetings of its interest rate-setting governing council, a controversial proposal likely to be seen by the bank as a direct assault on its independence because of the pressure it would place on the national representatives who sit on the body.
Financial Times, July 20 2008

The ECB chief reiterated that the bank remains "inflexibly attached" to its goal of maintaining price stability.
"If we had reduced interest rates, the moral hazard is that we would have been asking citizens to bail out the banks."
EU Observer 26/3 2008

"The period of relatively high inflation rates will be more protracted than previously expected," he said before the European Parliament's economic and monetary affairs committee.

The ECB has left its main rate unchanged at 4 percent since the credit market crunch in August, while the US Federal Reserve has cut its main rate six times.

His comments come despite complaints by France among others that its exporters are being harmed by the high rate of the euro against the dollar.

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Joseph Stiglitz, a Nobel-prize winning economist,
The European Central Bank's mandate, which sets price stability as the sole objective, is ``flawed'' because it prevents ECB President Jean-Claude Trichet from supporting job creation.
Bloomberg Feb. 26 2008

European monetary-policy makers may also be underestimating the risks to economic growth, Stiglitz said. The European Central Bank's mandate, which sets price stability as the sole objective, is ``flawed'' because it prevents ECB President Jean-Claude Trichet from supporting job creation.

``He should not be focusing so much on inflation especially when so much of it is imported,'' Stiglitz said. ``Higher interest rates won't solve the problem of higher oil prices.''

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Vem vet bäst - ECB-chefen Trichet eller Lena Ek (centerpartiet)?
ECB under ledning av Jean-Claude Trichet har skrivit till EU:s ordförandeland Portugal.
Banken vill ändra det nuvarande förslaget till nytt EU-fördrag för att säkra sig från framtida politiska påtryckningar.
—Jag är inte säker på att hans tolkning av förslaget är korrekt, säger EU-politiker Lena Ek (c).
Anders Selnes, Europaportalen / 2007-08-17


In a letter sent to the EU presidency ECB head Jean-Claude Trichet asked for
specific changes that would guarantee that the bank has a special status,

separate from other EU institutions such as the parliament and commission.
EU Observer 13/8 2007

This special status was secured in the original draft EU constitution, which fell by the wayside after being rejected by French and Dutch voters two years ago. But the clause did not make it into the outline for a new EU treaty agreed by EU leaders before the summer and set to be finalised by the end of the year.

"The President of the ECB repeats with gravity that any attempt to seek to influence... the ECB in the performance of its tasks' violates Article 108 of the EC Treaty and that therefore such declarations are not acceptable,'' said a spokesperson on behalf of Mr Trichet.

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Lena Ek

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As the ECB prepares to raise its key interest rate to a six-year high of 4 percent tomorrow,
Trichet's faith in the importance of money supply is being questioned
by Christian Noyer, 56, who succeeded him as governor of the Bank of France and sits with him on the ECB's governing council.
Bloomberg 5/6 2007

With Mario Draghi's Bank of Italy lining up with Noyer against Trichet and Bundesbank President Axel Weber, the Frankfurt-based ECB is debating how to interpret money-supply data for the first time since its 1999 birth.

Money supply, as measured by M3, has expanded more than the 4.5 percent rate viewed by the ECB as non-inflationary in every month since May 2001. It increased 10.4 percent in April from a year earlier, close to the fastest pace in 24 years.

Germany's history of hyperinflation after World War I makes its policy makers particularly apprehensive about rising prices. In France, by contrast, Sarkozy won the election last month after a campaign featuring attacks against the ECB's focus on inflation instead of economic growth.

A May 23 Bundesbank report called money supply an ``indispensable element'' in gauging inflation pressures.
Weber said in a June 3 speech that monetary statistics still contain ``valuable information'' that ``help predict future inflation.''

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Jean-Claude Trichet, European Central Bank president, on Friday delivered a stiff warning to eurozone finance ministers to back off in an escalating dispute over the bank’s independence.
Mr Trichet pointed out that it was his signature on euro banknotes and that it was unlawful under the EU treaty for finance ministers to give instructions or try to influence the bank.
Financial Times, 9/9 2006

Trichet warns against loosening of stability pact
Financial Times 22/9 2004

From the ECB's point of view, the recent proposal to introduce into the Constitution an extended enabling clause which would allow the European Council to amend, by unanimity, important parts of the Statute of the ESCB and of the ECB is certainly not welcome.

ECB President Mr Trichet, giving evidence at the European parliament 1/12 2003

In a letter which I sent to the current President of the Council, Mr Frattini, last week, I stressed that the ECB is seriously concerned about this proposal.

Such an expansion of the simplified amendment procedure would imply a far-reaching change to the current constitution of the ESCB, which the ECB could not support. click here

The head of the European Central Bank (ECB), Wim Duisenberg, has agreed to stay on past his scheduled retirement date while his designated successor awaits a trial verdict.
"If Trichet is not in a position to get the job, another Frenchman will be nominated,"

BBC 6/4 2003

He told reporters on Saturday he would accept a proposal by European Union finance ministers to remain in his post until a successor was appointed. Mr Duisenberg, who will be 68 in July, did not say how long he was prepared to stay on. European Union finance ministers agreed during a two-day meeting in Athens with their central bank governors to invite the Dutchman to stay in his post

. I will be president of the European Central Bank up until the day my duly appointed successor can take office Wim Duisenberg

The reason for the delay is because his designated successor, Bank of France chief Jean-Claude Trichet, is waiting for a court verdict, due on 18 June, on charges of complicity in the Credit Lyonnais banking scandal. If found guilty, Mr Trichet's chances of becoming the second most powerful central banker in the world, after US Federal Reserve chairman Alan Greenspan, would effectively be ruined.

Luxembourg's Prime Minister Jean-Claude Juncker, who is also the country's finance minister, said on Friday a Frenchman would definitely succeed Mr Duisenberg.
"If Trichet is not in a position to get the job, another Frenchman will be nominated," Mr Juncker said.

Början på sidan

Bank of France Governor Jean-Claude Trichet has gone on trial
A conviction could jeopardise a plan for Mr Trichet to replace
Wim Duisenberg as president ECB
BBC 6/1 2003

Bank of France Governor Jean-Claude Trichet has gone on trial over his alleged role in one of the largest banking scandals in the country's history.
Mr Trichet is accused of helping to conceal the full extent of losses run up by the then-state owned bank, Credit Lyonnais, nearly a decade ago, when he was treasury director at the French finance ministry. Eight other executives and officials are standing trial with Mr Trichet, who denies all charges against him.

A conviction could jeopardise a plan for Mr Trichet to replace Wim Duisenberg as president of the European Central Bank (ECB), the BBC's Europe business correspondent Patrick Bartlett says.

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M. Trichet is a graduate of the Ecole Nationale d'Administration, the most prestigious seat of learning in France, which trains the country's top civil servants.
He virtually wrote the text of the Maastricht Treaty and was an indefatigable proponent of
keeping the French franc strong in the run-up to the passage to the euro.
At The Independent via EU Observer

Frankrikes centralbankschef Jean-Claude Trichet riskerar åtal för att ha försökt försköna omfattningen av krisen i storbanken Crédit Lyonnais.

En förundersökning mot den 57-årige Trichet har inletts meddelades det i fredags.

Förundersökningen innebär framför allt att frågan väcks om det är möjligt för Trichet att som planerat ta över som chef för den europeiska centralbanken år 2002.

Franska tidningar lutade i går åt att Trichet blivit otänkbar för posten. Tidningen Libération sade i en ledarkommentar att ambitionerna med en oberoende centralbank kräver att inga skuggor faller över dem som leder den.

Det var i maj 1998 somfransmännen vid det europeiska toppmötet i Bryssel efter hård ragkamp lyckades få igenom en kompromiss i frågan om chefskapet för den nya centralbanken. Kompromissen innebar att Trichet i halvtid skulle ta över efter holländaren Wim Duisenberg.

Även om principen om att man är oskyldig tills man blivit dömd också gäller centralbankschefer har detta i praktiken inte varit fallet i Frankrike de senaste åren. Ministrar som varit åtalade har fått avgå och detta drabbade också ordföranden i författningsdomstolen Roland Dumas, tidigare utrikesminister.

Jean-Claude Trichet har alltid underhållet bilden av sig själv som den oklanderlige och omutlige tjänstemannen. Nu misstänks han för att 1992-93, då han var chef för Le Trésor den administration som bl a förvaltar statens intressen i statliga företag, ha friserat förlustsiffrorna för Crédit Lyonnais.

Överenskommelse nådd om Crédit Lyonnais
EU-NYTT Maj 1998

Kommissionen och den franska regeringen har nått en överenskommelse om den franska banken Crédit Lyonnais framtid. Överenskommelsen innebär att det statsstöd som givits banken mellan 1994 och 1997 i efterhand kommer att godkännas av kommissionen. Dock måste vissa villkor uppfyllas så att banken ekonomiskt kommer att stå på egna ben i fortsättningen.

Stora delar av den europeiska verksamheten liksom bankens rörelse i Asien och USA samt andra tillgångar kommer att säljas i syfte att skapa en lönsam verksamhet. Dessutom tvingas franska staten att privatisera Crédit Lyonnais senast hösten 1999.

Advokatfirman Vinge

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French Magistrates to Place ECB's Trichet Under Investigation
April 28 French magistrates investigating the accounts of Credit Lyonnais plan to place the governor of the Bank of France, Jean-Claude Trichet, under official investigation, the central bank said.
Trichet was head of the French Treasury from 1987 to 1993. Magistrates are investigating the accounts of Credit Lyonnais for 1992 and the first-half of 1993.
As governor of the Bank of France, Trichet is also a member of the European Central Bank's 17-member policy-setting committee.

Legal troubles for ECB contender
From FT, 2000-04-29

Jean-Claude Trichet's reputation precedes him. The governor of the Bank of France has earned the nickname "Ayatollah of the strong franc" for his hardline tactics regarding monetary policy, which often put him at odds with the prime minister and president of France.

"I have firm confidence in the legal system of our country and I am at the complete disposal of the magistrates, to whom I will explain the absolute good faith of the Department of the Treasury," Mr Trichet said in a statement on Friday.

Mr Trichet, who has not been formally charged but could face prosecution, is to be interrogated by an investigating magistrate for his responsibility in the alleged "publication of false information to the markets and presentation of inaccurate accounts".

As director of the French treasury between 1987 and 1993, Mr Trichet can be held legally responsible for potentially illegal activities conducted by Lyonnais, which was then state-owned.

Mr Trichet, 57, a native of Lyon, is a civil mining engineer by training and holds the title of professor at the Institut d'etudes politiques. He is a graduate of the Ecole Nationale d'Administration, the finishing school for many of France's top civil servants. He is the son of a university professor.

After graduating, Mr Trichet sealed his career as a civil servant, holding various positions at the Finance Ministry and the Treasury. From 1978 to 1981, he was an adviser to President Valery Giscard d'Estaing.

He was named Treasury director by the right wing French Government in 1987, and kept the job when the socialist party took over in 1988, even as other political appointees lost theirs. In 1993 he was appointed governor of the Bank of France.

Mr Trichet faced criticism from both parties for the Bank's tough line on interest rates: Conservative President Jacques Chirac and Socialist Prime Minister Lionel Jospin both said that interest rates were too high during his tenure.

But that was not the only criticism Mr Trichet received. He angered President Chirac during presidential elections in 1995 when the Bank called for tougher policies to reduce France's budget deficit. President Chirac rebuked the feisty bank governor, saying that central bankers should not meddle in politics. At the time, political pundits in France speculated that the disagreement with Mr Chirac would destroy Trichet's hopes of becoming France's candidate for the ECB.

It appears that the risk to his candidacy has come from a different quarter.

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Trichet faces investigation over Crédit Lyonnais
From FT, April 28

Jean-Claude Trichet, governor of the French central bank, said on Friday he was to be put under formal investigation for his role in the near bankruptcy in the early 1990s of Crédit Lyonnais, then a state-owned bank.

The incident could undermine Mr Trichet's chances of succeeding Wim Duisenberg as president of the European central bank in 2002, as agreed informally two years ago by European heads of state.

Mr Trichet's troubles are also an embarrassment for the French authorities, coming just a few months after Dominique Strauss-Kahn, the popular socialist finance minister, was forced to resign for similar reasons. The two investigations have unearthed suspicions of corruption dating back to the presidency of the late François Mitterrand.

Mr Trichet, who is not formally charged but could face prosecution, is to be interrogated by an investigating magistrate for his responsibility in the alleged "publication of false information to the markets and presentation of inaccurate accounts".

As director of the treasury between 1987 and 1993, Mr Trichet can be held legally responsible for potentially illegal activities conducted by Crédit Lyonnais.

Mr Trichet said: "I am deeply surprised by this information, because the treasury division was at the time behind the thorough investigations that led to the change in the strategic orientation of this commercial bank."

Crédit Lyonnais flirted with bankruptcy after suffering huge losses linked to an expansion spree in the late 1980s and early 1990s.

It was privatised last year, after being bailed out with state subsidies estimated at FFr100bn by the French government and almost FFr200bn by the European Commission, which imposed restrictions on the bank's activities before approving the aid.

Until recently, Lionel Jospin, the prime minister, had sought to distance himself from the corruption linked to socialist governments in the Mitterrand era, when one former prime minister, Pierre Bérégovoy, committed suicide in the midst of a financial scandal.

In a recent government reshuffle to inject new momentum into his government ahead of important elections next year and in 2002, Mr Jospin brought back political heavyweights from the past, including the new finance minister Laurent Fabius, who was prime minister under Mitterrand.

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The Dirtiest Bank In the World
From Forbes 1999-12-13

Once a force in global finance, the bank is little more than half its former size, having been looted by criminals, racked by scandal and decimated by the loss of at least $20 billion--and quite possibly far more--in reckless and corrupt investments. It is by far the biggest banking debacle in history. This institution, nationalized by the French government in 1945, is an object lesson in what can go wrong in a government-owned commercial enterprise without accountability.

A criminal inquiry, which began quietly five years ago as a narrow probe of an eccentric Italian tycoon, has grown dramatically into more than 100 separate cases of suspected fraud, embezzlement, bribery, perjury, forgery, money-laundering, and even blackmail and arson in France and several other nations, including the U.S.

Full text of Forbes story

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