The European budget independent agency should be created and integrated into the structure of the European Commission (EC) to implement pact for stability and growth, said on Monday head of the European Central Bank (ECB), Jean-Claude Trichet. Trichet, who was heard by the European Parliament at the start of new week, also again advocate for the strict application of EU budgetary rules to be changed before the current arrangements. “We believe that in some areas, even within the commission itself has (administrative) units which can be independent,” said ECB chief, stressing that the budget agency may be tasked with ongoing monitoring and diagnosis ” the budgetary situation in Member States. “We were very clear, when we say we do not want to be prejudiced exclusive privilege of the Committee with regard to warnings, recommendations and suggestions (for budgetary situations). But many insist on the existence of this independent unit as part of a committee.” In mid-May the European Commission proposed a “European budget semester, in which member countries to submit projects for national budgets. Then Germany, in turn, gave the idea of supervision budgets to be entrusted to an independent institute or the ECB. This proposal has caused concerns about possible weakening of the role of the European Commission as an institution.
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“Italy is not in the same situation as Greece. Has shown a persistence in this difficult period. Separately, showed that it was able to hold the annual budget deficit and to implement EU rules, said in an interview with the Italian business daily Il Sole 24 Ore, President of the European Central Bank (ECB) Jean-Claude Trichet. Thus, he denied rumors that the country of the Apennines can be the next member of the eurozone, which would be in severe economic situation. ECB President added that today’s situation is a signal to the countries of the monetary union, it must work hard to make their economies more flexible and increase their potential. According to Trichet improving the productivity of labor is beneficial to increase exports and create jobs. In his interview with Jean-Claude Trichet pointed out that at this stage sees no need for the financial mechanism in support of Greece to be used. “Greece is firmly continue with its rehabilitation program. Asked whether Greece can declare inability to pay its obligations, Trichet said that “this is not an option, taking into account the discussion of government measures to reduce the deficit or public statements by leaders of the eurozone.
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The European Central Bank (ECB) continued to gradually decreased anti-crisis measures to support the economy. Since April the ECB returns to its usual practice to conduct auctions for the banks to provide the 3-month loans instead of 6-month, announced the bank’s governor Jean-Claude Trichet. This happened immediately after the board of the financial institution decides to maintain a historically low level of interest of 1 percent for 11 consecutive month, said agency Reuters. Trichet stressed that ECB will offer banks and unlimited credit in one quarter by providing so-called weekly credits. The manager of the ECB’s main interest at the time the central banks of Member States have an acceptable level, but the process of economic revival will be uneven, and inflation in the medium term - moderate. The ECB’s decision to return to the performance of standard auctions, which are offered 3-month loans will most likely cause banks to step up and start increasingly to seek “the weekly credits” that allow financial resource for short-term low interest rate.
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