Trichet insists ECB is 'fiercely and totally independent'

10th May 2010, Comments 0 comments

European Central Bank chief Jean-Claude Trichet insisted Monday that the bank did not bow to political pressure in buying public debt as part of an EU bailout and remained totally independent.

"We are fiercely and totally independent. This decision is the decision of the governing council and not the result of any kind of pressure of any sort," said Trichet.

As part of a 750-billion-euro (trillion-dollar) rescue package for eurozone economies, the ECB said it would intervene in "public and private debt securities markets to ensure depth and liquidity."

Analysts said the move compromised the ECB's independence.

But Trichet said that the ECB's governing council had made its decision "taking into account the circumstances to do what we had to do, totally independently of any kind of signalling or suggestion or whatever."

"I told that to the various governments of Europe in the fiercest manner including when I had a meeting with the heads. That's as clear as that," he said.

Trichet insisted that the ECB had made its own judgment that "the normal transmission of our monetary policy was hampered" and that a number of markets were "dysfunctional."

"That is the reason why we took our decision," he said.

The head of the ECB also revealed that the purchase of debt securities has begun, although he would not discuss the scope of the operation or which countries it involved.

"I will not say (anything about) division of labour, it's a euro-system operation. It started this morning," he said.

Trichet also stressed that it was crucial that the governments committed to taking all necessary measures should meet their fiscal targets.

"It is absolutely crucial, absolutely essential in the view of the governing council of the ECB," he said.

© 2010 AFP

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