Question: We had a debate today in the German Parliament, and the leader of the opposition, Mr Gabriel, attacked the government, but he also attacked the ECB very much. He said that the Securities Markets Programme is the socialisation of debt and he said and I quote “Mrs Merkel, who pushed you to buy those bonds?” and then he said “The €130 billion is the first tranche of Merkel Bonds” and he said to Mrs Merkel “You transformed the ECB from an anchor of stability into a European bad bank”. He said that the ECB is damaged in a sustainable way and that the stability of the money is in danger. It is normal people who are arguing that way in Germany and, if you talk to economists on an off-the-record basis, they say “maybe we should discuss going back to the Deutsche Mark”. What do you tell those people?
Trichet: I will say the following: first, we were called to deliver price stability! We were called on by all the democracies of Europe to deliver price stability and, in particular, of course by the 17 democracies that asked us to issue the currency in their 17 countries. We have delivered price stability over the first 12-13 years of the euro! Impeccably! I would like very much to hear some congratulations for this institution, which has delivered price stability in Germany over almost 13 years at approximately 1.55% - as the yearly average of inflation - we will recalculate the figure to the second decimal. This figure is better than any ever obtained in this country over a period of 13 years in the past 50 years. So, my first remark is this: we have a mandate and we deliver on our mandate! And we deliver in a way that is not only numerically convincing, but which is better than anything achieved in the past.
A second remark I would like to make is that, 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. This did not happen by chance. It happened because we decided frequently to do things that we were not recommended to do by the various governments. Our independence is inflexible. We were asked to decrease rates in 2004 by the Heads of State or Government of France and Germany, when we were at 2% and the United States was at 1%. We said no and we did not decrease rates. At the end of 2005, we increased rates when ten governments out of twelve were telling us not to do so. We also received the good advice not to do so of the IMF and of the OECD. So, it is not by chance that we have delivered price stability. If we embarked on the Securities Markets Programme for monetary policy reasons and to help restore a better transmission of our interest rate decision, it was because the governments in question, despite everything that we had said to them, did not behave properly and did not monitor things as they should have done. May I remind you that, in 2004 and 2005, some important governments in Europe were asking for a weakening of the Stability and Growth Pact? Do you remember that? And do you remember which governments were asking to weaken the Stability and Growth Pact? The three big governments of Europe, namely France, Germany and Italy! So, let me remind you that we are in the worst crisis since the Second World War. We are doing our job and it is not an easy one! The way in which our democracies are organised such that we have a living debate is excellent. I do not, of course, take part in any kind of public or political debate. We issue the currency for all of our fellow citizens, of all sensitivities, and we deliver price stability. Also, I should mention that it is the most vulnerable, the weakest and the poorest of our fellow citizens who most require us to be absolutely sure to deliver price stability. The situation is difficult, but we have taken all of our decisions in full independence and we try to live up to our responsibilities, even when these are very heavy responsibilities. We expect all other authorities to live up to their responsibilities as well. We are aware that this is not easy for any particular authority in the present circumstances. We have full respect for the difficulty involved in taking the decisions, whether these decisions are taken by governments or by parliaments, as well as full respect for the challenges posed by these times and for the fact that our fellow citizens are the masters – at the end of the day, as a fiercely independent institution, we depend on the sentiment of 332 million fellow citizens, as does any independent entity in democracies. Thank you for your excellent question, which was very stimulating!
