More integration key to solving eurozone crisis: Trichet

9th June 2010, Comments 0 comments

The way to solve the eurozone's debt crisis is through greater integration of members' economic policies, European Central Bank president Jean-Claude Trichet said on Wednesday.

"The solution to our difficulties lies in more -- not less -- European integration," Trichet told the charitable Feri Foundation in Frankfurt according to a text released in advance.

He spoke a day before the ECB governing council was to meet amidst the worst crisis faced by the 16-nation eurozone since the European single currency's launch in 1999.

A debt crisis which began in Greece has affected other eurozone members and forced the bloc to stump up hundreds of billions of euros (dollars) in guarantees to make sure its weakest members can finance their budgets.

"Working together to meet these challenges is not just an act of solidarity; it is very much in the best interests of all the participating countries and their citizens," Trichet said.

"Monetary union is not a matter of convenience; it offers us protection and improves resilience, provided that we embrace the underlying ideas and principles."

The ECB chief reiterated a call for a "quantum leap in strengthening the governance of economic policies and surveillance" after Greece managed to keep its dire financial situation under wraps for several years.

He also called again on financial institutions such as banks to "reestablish a sense of values, in particular a strong sense of responsibility vis-a-vis the real economy."

To attain that goal, the central banker warned, "legislators and regulators may have to introduce a new set of incentives for those operating in the financial sector."

© 2010 AFP

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