Almost 13 years after its demise, the Deutsche mark retains enough potency to haunt Jean-Claude Trichet’s final days as European Central Bank president.
Trichet, 68, today lost his cool with a reporter who asked whether Germany should abandon the euro and return to the mark as Europe’s debt crisis roils markets and spooks voters. “I would like very much to hear the congratulations for an institution which has delivered price stability in Germany for almost 13 years,” Trichet said in Frankfurt in an uncharacteristically raised voice. “It’s not by chance we have delivered price stability,” he said. “We do our job, it’s not an easy job.” As Greece’s fiscal crisis ricocheted through European markets, Trichet has spent much of the last two years shuttling back and forth between Frankfurt and national capitals for private meetings and a series of marathon summits.
The Frenchman, whose eight-year term ends October 31., oversaw decisions to cut interest rates to a record low and provide banks with unlimited liquidity. He also took the unprecedented step of buying the bonds of countries including Ireland, Spain and Italy to lower yields. As the ECB’s involvement in crisis fighting increased, Trichet has criticized governments for not doing enough.
GERMAN POLL
“I’ve never seen Mr. Trichet get so angry before,” said Nick Kounis, head of macro research at ABN Amro in Amsterdam. “Trichet underlined to the German public that the ECB is still a trustworthy institution, as the question was punching hard against that view.”
While the ECB has managed to keep inflation in the 17- nation region just below 2 percent since 1999, 37 percent of Germans said the country would be better off if it reintroduced the mark, according to an Emnid survey for broadcaster N24, published on Aug. 18. The same proportion said the country is better off with the euro, while another 19 percent said that a return to the mark wouldn’t change anything, the poll showed.
The ECB left its benchmark interest rate unchanged at 1.5 percent today after its monthly meeting and the press conference was Trichet’s second last before he is succeeded by Italy’s Mario Draghi.
He ended his six-minute response to the Deutsche mark question with a smile.
“Thank you for your excellent question, which was very stimulating,” he said.
