*DJ Trichet: No Crisis Of The Euro As A Currency
He looks at the euro as a currency as per the single mandate of price stability.
*DJ Trichet: Euro As Currency Is Evidently Not In Danger
There is no euro crisis as the value of the euro has been reasonably strong.
*DJ Trichet: Fear That Non-Standard Measures Stoke Inflation Totally Unfounded
They are now comfortable that the bond buying is not inflationary as it doesn’t alter actual spending on goods and services (aggregate demand) and in fact the required austerity reduces it.
*DJ Trichet: ECB Still Against Taking Defaulted Govt Bonds As Collateral
Ok, but so far there aren’t any.
*DJ Trichet: ECB Still Against Credit Event
No reason to let any member nation default and be released from their obligations.
*DJ Trichet: Rescue Fund Must Be Operational As Soon As Possible
*DJ Trichet: EFSF Should Be Appropriately Leveraged
Implying ECB involvement as suspected .
*DJ Trichet: Govts Should Be Responsible For Making Safety Nets Work
Which requires they be backstopped by the ECB which dictates austerity in return for said backstopping.
*DJ Trichet: EFSF Shouldn’t Get Banking Licence
*DJ Trichet: Banks Must Shore Up Capital As Soon As Possible
*DJ Trichet: Govts Must Be Ready To Recapitalize Banks If Needed
All of which requires ECB as backstop directly or indirectly.
*DJ Trichet: Need Euro-Zone Fin Min, Executive Branch In Future
Which would be ECB ‘funded’ much like the US Fed/treasury relation.
*DJ Trichet: Crisis Questions Econ, Fincl Strategy Of All Developed Economies
*DJ Trichet: Working Assumption That Govts Will Overcome Crisis
*DJ Trichet: Euro Is Credible, Stable
Again, the value of the euro is telling for the ECB.