Trichet warns crisis not over, urges more action

The eurozone debt crisis that harassed the single currency bloc for years has not finished even with a welcomed solution yielded on the European Union (EU) summit, as the world and markets are waiting for swift and complete government actions, European Central Bank (ECB) President Jean-Claude Trichet said Sunday. In an interviewed with German weekly Bild am Sonntag, the Sunday edition of the mass-circulation newspaper "Bild", Trichet said the eurozone sovereign debt crisis, starting from Greek last year and spreading to other countries like Ireland and Spain, has stemmed from "the weaknesses of the advanced economies." Despite Wednesday's decisive EU summit that hammered out a series of ambitious responses, "the crisis is not over," warned Trichet, a 68-year-old Frenchman that heads the ECB for eight years and is to step down on Monday. "The decisions reached at the summit need to be implemented with great precision and speed," Trichet said. "The quick and complete implementation of the decisions is now absolutely decisive." For eurozone leaders that vowed to end the year-long crisis, "it's time for action," he added. However, after this week's summit, "I'm nevertheless confident that the eurozone governments will be able to restore financial stability, provided the bloc's Stability Pact rules are comprehensively and more aggressively enforced," the outgoing Trichet said, referring to a series of eurozone economic guidelines, including demanding a member state to keep its deficits under three percent of gross domestic product (GDP). These rules were not strictly obeyed by many eurozone states, which were "serious mistakes" made by some eurozone governments in Trichet's eyes. In late 2009, Greece reported its budget deficit accounted for 12.7 percent of GDP, shocking the global market and triggering the debt crisis over the continent. As for the ECB's controversial moves on buying bonds of heavily indebted countries, Trichet said taking these special measures were necessary so that the bank's interest rate decisions are transmitted correctly to the economy. "The ECB council decided all special measures due to monetary policy purposes and in complete independence," he stressed. "Members of the ECB council cannot take orders from a government or interest groups." "Once governments have new tools that can restore the financial stability, and they are ready to use them, there is no reason for us to hold on to these special measures," Trichet said. With regards to the recent Occupy Movement, Trichet believed that "we should pay very close attention to the signals coming from the gathering" -- countries should strengthen the robustness of the economies that are able to create wealth and jobs and prevent banks' behaviours that are "not compatible with values of our society." "We all should work hard to strengthen the financial system, both at European and at global level," he added.