Trichet: It Is Not The Time To Exit Yet

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It is not an appropriate time to exit stimulus measures as it would be premature to think that the crisis is over and conquered in a sustainable manner, European Central Bank President Jean-Claude Trichet said Friday.

"Our future decisions on the phasing-out of non-standard measures will be guided by a transparent exit strategy. This exit strategy has been designed around four cornerstones," Trichet said in a lecture at the University of Venice.

He said exceptional times have called for exceptional measures. But, policymakers will need to phase out these measures once the rationale for their adoption fades away and the situation normalizes.

Moreover, he said the crisis has not changed the ECB's primary objective. This means that any non-standard measure whose continuation would compromise the maintenance of price stability at any time in the future will be undone promptly and unequivocally.

He noted that the impact of the macroeconomic stimulus packages and other policy measures may prove to be stronger than currently foreseen.

Further, he said the Italian economy is undergoing an unprecedented adjustment, as are virtually all developed countries throughout the world, but it should not delay economic reforms.

"The crisis can be the trigger for an ambitious plan to modernize the Italian economy and to make it more dynamic," Trichet said.

It is not an appropriate time to exit stimulus measures as it would be premature to think that the crisis is over and conquered in a sustainable manner, European Central Bank President Jean-Claude Trichet said Friday. (Market News Provided by RTTNews)