Trichet attacks Europe's number one spender

Monday, September 24, 2007

Jean-Claude Trichet

Jean-Claude Trichet, president of the Frankfurt, Germany, based European Central Bank ECB, today in an interview with radio station Europe-1 scolded France for spending to much, warning the country's finances were in a 'critical' state.

Previously, French president Nicolas Sarcozy had attacked the ECB for not lowering rates even when the euro reached a new record high of 1.41 € against the US dollar. Trichet used the radio interview for a counter-attack and claimed that the problems France might have with international competition were homemade and resulted from "France’s high public expenditure and inability to curb the rise in its production costs", stating that France should take Germany as a role model, with lower public expenditure and higher export rates.

As for exchange rates, Trichet referred to the G7 group, where exchange rates are and should be negotiated, and just mentioned the quote of Federal Reserve chairman Ben Bernanke, that a strong dollar was good for the US economy.