Jean-Claude Trichet sees no liquidity problems in the Eurozone

The European Parliament on Monday expressed broad support and full confidence in the way that the European Central Bank is handling what clearly is the worst financial crisis since the second World War.

Addressing a packed committee-room in Brussels, ECB chief Jean-Claude Trichet said that the ECB, together with national central banks, has spent more than 115 billion euro since the crisis began. This money was spent on distressed bonds from countries like Greece and Portugal in order to support the market. "The security market programmes strictly aims at correcting mal functioning of markets. The prohibition of monetary financing underlines precisely the fact that budgetary discipline is of the utmost importance", Trichet said. Responding to concerns about a possible lack of liquidity in the Eurozone, Trichet said that this simply was not a possibility because of the immense volumes of money that circulates in Europe.

Trichet said that buying troubled bonds in the open market does not clash with the ECB's goal of keeping the cost of living in the Eurozone under control, something that the central bank has successfully managed since the euro was created. The ECB chief said that uncertainty in the markets remains high, which means the European central bank will continue to offer its support. Uncertainty remains particularly high. This mainly relates to ongoing fiscal and economic adjustment in a number of Euro area countries and most other advanced economies, as well as the overall outlook of for the global economy. In particular the US has been facing both fiscal and structural head winds admit economic prospects", Trichet said.

Trichet called on Eurozone governments to rapidly implement the agreement they reach in July about a second bailout for Greece and that more swift actions will be necessary in the future.