Price stability in the euro-area will “prevail” for the next 10 years, Bild Zeitung said, citing an interview with outgoing European Central Bank President Jean-Claude Trichet.
“In the coming 10 years, the inflation rate will likely be very low,” Trichet told the newspaper. “According to current expectations, it will lie around 1.8 percent. That means price stability prevails in the euro-zone.” He said the same doesn’t apply to financial stability.
“Governments in Europe have made grave errors by not holding to the Stability and Growth Pact,” the newspaper cited Trichet as saying. The central banker also said Europe needs to strengthen its political structures and move toward greater political union, according to the newspaper. Such developments will require treaty changes, he told the newspaper.
Trichet also said banks should reconsider the payment of “excessive bonuses,” though he warned against restricting financial institutions too much, Bild reported. “We would only be shooting ourselves in the foot,” he said.
Trichet told the newspaper he plans to “remain active” when he steps down from the post he has held for eight years this month.
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