European Central Bank President Jean-Claude Trichet said Europe can surmount its sovereign debt crisis by showing the will and determination to do so.
“Naturally the Europeans can manage the issue,” Trichet said in an interview with the Financial Times Deutschland, according to a transcript released yesterday by the Frankfurt-based ECB. “It is not a question of technique. It is a question of will and determination.”
Trichet said the euro is not in danger and remains “a highly credible currency.” He reiterated that the ECB will not accept as collateral bonds from a nation that defaults.
“If a country defaults, we can no longer accept as normal eligible collateral defaulted bonds issued by the government of that country,” Trichet said. “Because, in the eyes of the Governing Council, this would impair our ability to be an anchor of confidence and stability.”
In the event of a decision leading to a selective default or a default, “the governments would have to take care that the Eurosystem is presented collateral that it could accept,” he said.
Asked if German Chancellor Angela Merkel has acted too slowly during the crisis, Trichet replied: “Not in the least. I would see a discussion of this kind as being completely misplaced in the current situation.”
Leaders will meet July 21 in Brussels to discuss “the financial stability of the euro area as a whole and the future financing of the Greek program,” European Union President Herman van Rompuy said in a July 15 statement. Among topics for the talks is a potential overhaul of the 440-bllion euro ($623 billion) rescue fund to enable Greece to better pay its bills.