Jean-Claude Trichet addresses the IIEA

President of the European Central Bank Discusses Irish and European Economic Situation at Institute of International and European Affairs

President of the European Central Bank (ECB), Mr. Jean Claude Trichet, spoke today (Thursday 26 February) – in a rare public address – at the Institute of International and European Affairs (IIEA), Dublin, on the current situation facing the Irish and European economies.

The address, entitled “The external and internal dimensions of Europe’s competitiveness”, covered a wide range of aspects including: globalisation and Europe’s external competitiveness; the internal dimension of European competitiveness; the current crisis; and the challenges for policies.

Chairman of the IIEA, Mr. Brendan Halligan, commented following Mr. Trichet’s speech that “Mr. Trichet’s address expressed positive sentiments on the Irish economy, while also providing a necessary reminder of the realities of the Irish economy.”

“It is also a reassurance that the ECB is clearly on top of all the issues and very much up to the tasks facing the economies of the Eurozone,” Mr. Halligan added.

“Crucially for Ireland,” Mr. Trichet remarked, “this unprecedented international shock has come at the same time as the economy is undergoing a necessary rebalancing in the composition of its growth, intensifying the challenges it faces. In particular the construction and banking sectors need to adjust.”

He went on to observe that “the Irish government is acting resolutely to address this situation.” He emphasised the necessity of a “fiscal policy that convincingly reduces future public deficits.”

“In addition,” Mr. Trichet said, “measures have been taken or are under way to recover lost competitiveness and to exploit the country’s comparative advantages in its high-tech, high-skills industries.”

He placed a strong emphasis on the need for Euro area governments and social partners to “take account of the competitiveness and labour market conditions” when setting wages, showing “courageous policies of spending restraint especially in the case of public wages.” He added that when addressing the completion of the Single Market that “it is of the utmost importance to resist protectionist measures.”

Mr. Trichet concluded by reiterating that he is “optimistic about the prospects for this country [Ireland].” His view is that “the open nature of this economy with its associated flexibility and adaptability means that Ireland will be well placed to benefit greatly from the eventual recovery and to compete effectively in the global economy in the future.”