Governments of the euro zone that are struggling to prevent the euro crisis developing into a full-blown depression are navigating in uncharted waters, Jean-Claude Trichet told the AAPA on June 27.
The former head of the European Central Bank told two dozen AAPA members that the euro zone has successfully weathered three crises since the Lehman Brothers collapse sparked a financial maelstrom in 2007, thanks to bold decision-making by central banks and governments. But he acknowledged that government officials and central bankers are still writing the text book as they deal with unprecedented successive crises, and predicted that extraordinary measures will continue to be necessary if future emergencies occur.
The meeting, kindly hosted by Bloomberg, was a rare occasion for members to discuss the latest politico-economic developments – notably the Greek situation and its implications for the rest of the world – with one of the euro area’s top economic policymakers until he stepped down at the end of last year after serving two five-year terms.
Trichet fielded questions about France’s competitive position, defense policy (he recently joined the board of aerospace giant EADS), the situation in Greece and whether or not weak activity and rising unemployment could lead to a shift in the ECB’s statutes to give it more responsibility for sustaining economic growth.
-David Pearson
