US, EU deficits not sustainable: Trichet
Saturday, 30 January 2010
PARIS, Jan 29 (AFP): The head of the European Central Bank warned yesterday that US and European Union deficits were unsustainable and urged authorities to take tough measures to strengthen public finances.
"We all have a very, very big challenge there," Jean-Claude Trichet told CNBC television.
"The levels of public finance deficit are not sustainable on both sides of the Atlantic-that's absolutely clear.
"We have to reinforce the confidence of our own people, also our entrepreneurs, in our capacity to go back to a sustainable position."
He appealed to "all European countries to stick to the rigorous implementation of the programs that have ... been decided."
The programs aim to curb public spending, which surged as governments spent heavily to beat back recession.
Trichet cited no eurozone member in particular but market concerns have focused lately on worrisome debt and deficit levels in Greece, Ireland, Spain and Portugal.
A finance crisis in Greece, which last month was hit by downgrades from all three international rating agencies, is seen by analysts and officials as posing a threat to the cohesion and health of the eurozone.
Greek Prime Minister George Papandreou, speaking at the World Economic Forum in Davos, Switzerland on Thursday, lashed out at speculators he said were targeting his country as a "weak link" in the eurozone.
He admitted that Greece has a "credibility gap" but insisted that he had not sought a bailout from the country's European partners.
"We all have a very, very big challenge there," Jean-Claude Trichet told CNBC television.
"The levels of public finance deficit are not sustainable on both sides of the Atlantic-that's absolutely clear.
"We have to reinforce the confidence of our own people, also our entrepreneurs, in our capacity to go back to a sustainable position."
He appealed to "all European countries to stick to the rigorous implementation of the programs that have ... been decided."
The programs aim to curb public spending, which surged as governments spent heavily to beat back recession.
Trichet cited no eurozone member in particular but market concerns have focused lately on worrisome debt and deficit levels in Greece, Ireland, Spain and Portugal.
A finance crisis in Greece, which last month was hit by downgrades from all three international rating agencies, is seen by analysts and officials as posing a threat to the cohesion and health of the eurozone.
Greek Prime Minister George Papandreou, speaking at the World Economic Forum in Davos, Switzerland on Thursday, lashed out at speculators he said were targeting his country as a "weak link" in the eurozone.
He admitted that Greece has a "credibility gap" but insisted that he had not sought a bailout from the country's European partners.