Daily Archives: September 10, 2010

Slovakia’s refusal to back the Greek loan for Greece set a bad example, and the ECB should not support euro entry to applicants that may behave similarly, Reuters is reporting. (NB. We are unable to confirm these quotations, and the ECB, when asked, had no comment to make.)

BRATISLAVA/BRUSSELS, Sept 10 (Reuters) – Slovakia set a bad example by refusing support for a loan to Greece, and the European Central Bank will not support euro entry by others unless sure they will not take similar steps in the future, ECB President Jean-Claude Trichet was quoted as saying.

A memo from this week’s meeting of euro zone finance ministers, seen by Reuters, said Trichet was outraged at the refusal by Slovakia to participate in the Greek bailout.

Several EU officials said privately Slovakia could be snubbed by some of the 26 other EU member states because its decision is likely to complicate talks on the bloc’s budget, making the rich net payers less willing to grant aid to poorer countries.

“Trichet was outraged at the last Eurogroup by Slovakia’s refusal of a bilateral loan to Greece and said that had the ECB known Slovakia would behave like that, it would not have endorsed Slovakia’s euro adoption,” the memo summarising the discussion said.

 

Ralph Atkins

In his Financial Times interview, published today, Jean-Claude Trichet suggested the mood on the US economic outlook was “too negative”. The European Central Bank president was probably referring to the quite short-term.

A speech by Lorenzo Bini Smaghi, an executive board member, just posted on the ECB’s website, suggests the Frankfurt-institution is itself rather gloomy about longer-term US prospects. 

Ralph Atkins

Jean-Claude Trichet, the European Central Bank’s president, has grabbed a lot of attention in today’s European media for his proposal, made in an interview with the Financial Times, that fiscally irresponsible eurozone countries have their voting rights suspended temporarily. As I expected, some see his idea as straying too far into the political arena.

But, as ever, Mr Trichet was careful with his words in the FT interview, and his proposal has a fair chance of succeeding.  

Three suggestions are to be implemented from the government’s spending challenge – a public consultation that sought ideas for spending cuts. With a total identifiable saving of up to £2million, the first two ideas may be underwhelming in scope; cynics will say the Treasury had to be seen to do something:

1. To reduce the number of CRB checks for Junior Doctors, by taking a more common-sense approach across the NHS, so that junior doctors are not checked repeatedly over a short space of time. This will save up to a £1 million a year and cut administrative burdens for the NHS; 

The following is an edited version of an FT interview

“I don’t think that the euro area was close to disaster at all – seen from inside,” Jean-Claude Trichet tells Ralph and FT editor Lionel Barber. The ECB president argues that outsiders – traders in financial markets in London or New York, say – have misunderstood the eurozone and the forces that bind together the monetary union.