The European Central Bank has not started “printing money” in response to the continent’s debt crisis, its chief Jean-Claude Trichet insisted Wednesday.
“We haven’t changed monetary policy,” the ECB president told Europe 1 radio in France, promising that the bank would not abandon its inflation target or let the euro collapse.
“I am more confident than ever in the future of the euro,” he said, while nevertheless warning: “We have to strengthen oversight of budgetary policies adopted by this and that country.
“Our objective is price stability in the medium and long term.”
The European single currency zone has been plunged into fiscal crisis by spiralling deficits in Greece and some other countries, and this week Europe was forced to set up a trillion-dollar rescue fund to reassure markets.
The ECB has stepped in to securities markets to buy up debt held by some European governments and private sector creditors, trying to provide them breathing space as they get their books in order.
The move has been cautiously welcomed by governments, but some critics said it called into question the ECB’s independence to run monetary policy free of political interference from member states.
If the ECB buys up debt it puts more money into circulation and risks driving up eurozone inflation
Trichet insisted that the central bank remained independent. “We haven’t just started printing money,” he said. “You have to take quick decisions that don’t call inot question medium term price stability.”
