RENOWNED FOR his charm and impeccable decorum, Jean-Claude Trichet lost his cool yesterday as he took issue with German critics of the European Central Bank’s stewardship of the debt crisis.
After eight gruelling years at the helm of the ECB, Trichet hands over power to Italian central bank chief Mario Draghi in November.
“The situation is difficult, we have taken all our decisions in full independence and we try to be up to our responsibilities and they are very heavy those responsibilities, very heavy,” he said.
In his second last press conference as ECB president, the Frenchman provided a rare glimpse at the withering, defiant manner he is known to deploy in private when asserting his authority.
At issue was an apparently innocuous question from a German reporter who asked what Trichet’s message was for Germans who say their country should revert to the Deutsche mark.
The reporter mentioned claims by the leader of Germany’s Social Democrats, Sigmar Gabriel, that Chancellor Angela Merkel was dictating to the ECB. Gabriel also claimed the ECB’s intervention in sovereign bond markets had reduced it to an “inter-European bad bank”.
Trichet didn’t like this one bit. His voice rising, he said the move to buy up sovereign bonds arose “because the governments in question had not behaved properly despite all what we had said ourselves”.
The ECB delivered more price stability to Germany in the last 13 years than the country saw in the 50 years after the second World War, he said.
“We have a mandate, we deliver on our mandate and we deliver in a way which is not only I would say arithmetically, mathematically convincing but which is better than what was done in the past,” he said.
“In the worst crisis since the second World War we have maintained confidence in the currency and confidence in our capacity to deliver price stability. It was not by chance. It was because we decided very frequently to do things that we were not recommended by the various governments.”
The bank’s independence was inflexible, he declared.
“We were asked to decrease rates in 2004 by the heads of state of France and by the head of Germany. We were at 2 per cent, the US was at one, we said no, and we did not decrease rates,” he said.
“Can I remind us that in 2004 and 2005 some important governments in Europe were asking for weakening the Stability and Growth Pact?
“Do you remember that? Do you remember which government was asking for weakening the stability and growth pact? The three big governments of Europe, including of course France, Germany and Italy.
“So, only to remind that we are in the worst crisis since the second World War, we do our job.”
Trichet then turned to the reporter. “Thank you for your excellent question, which was stimulating.”
When the next questioner asked how he felt as he prepares to leave office, he said he would wait until next month’s press conference. “I will not speak twice, like those singers or actors.”
