EUR/USD is up 120 pips on the day and 70 pips of which is a result of Trichet's comments. 

The following are the comments made by the head of ECB:

  • ECB's Trichet said that Europe needs to consider tightening its central control over economic policies if it current efforts can't resolve the debt crisis.
  • Trichet expressed ideas of forming a EU finance ministry and a veto for EU authorities over spending and other majority domestic policy decisions.
  • Trichet added that loans and structural adjustment programs are part of the first stage of the aid process to debt laden EU nations.
  • As a first stage, it is justified to provide financial assistance in the context of a strong adjustment program. But if a country is still not delivering, I think all would agree that the second stage has to be different, Trichet said.
  • Would it go too far if we envisaged, at this second stage, giving euro area authorities a much deeper and authoritative say  in the formation of the country's economic policies if these go  harmfully astray? Trichet added.
  • ECB Trichet calls for creation of single EURO finance ministry
  • There is no crisis of the euro; strengthening rules is an urgent priority
  • Looking longer-term, he suggested a central finance ministry would fit with the existing single market, single currency and a single central bank.

  • Not necessarily a ministry of finance that administers a large federal budget. But a ministry of finance that would exert direct responsibilities in at least three domains: first, the surveillance of both fiscal policies and competitiveness policies, he said.

    Second, all the typical responsibilities of the executive branches as regards the union's integrated financial sector, said Trichet. Third, the representation of the union confederation in international financial institutions.

width=630