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EU's Barroso says he assured Trichet of support for ECB independence

Monday, February 11, 2008

BRUSSELS (Thomson Financial) - European Commission president Jose Manuel Barroso said he assured European Central Bank president Jean-Claude Trichet "of the commission's unwavering support for the independence" of the ECB during bilateral talks here today.

"The governance of the euro area has served us well," Barroso said in a statement before taking the unusual step of attending this evening's meeting of euro zone finance ministers.

He said his message at the meeting will be that while the euro's foundations and the Lisbon strategy of economic reforms are sound, much work remains to be done.

"We must strive to deliver growth, jobs, low inflation and low interest rates consistently over time," he said.

"We must not endanger the stability of those foundations by yielding to the temptations for protectionism, or futile attempts to stem financial globalisation, or an artificial stimulus of the economy," he said.

Barroso said Europe "has no rational reason to fear recession".

He added: "We must not take action -- and we must not send messages -- that could make the situation worse."

He called instead for efforts to contain the fallout from the recent market turmoil.

Barroso also urged member states to keep their deficits low.

His plea comes as ministers are due to debate France's plans to delay budget breakeven until 2012 from an agreed deadline of 2010.

Spanish economy minister Pedro Solbes also called on countries to stick to their deficit pledges.

"We are in favour of respecting our commitments," Solbes said when asked about the French deficit on his way into the meeting.

German finance minister Peer Steinbrueck urged member states to support the stability and growth pact underpinning the euro, and said that the larger member states, in particular, should reach budget balance by 2010.

"We agreed on a commitment in Berlin in April last year that in particular the great member states should bind themselves to the commitment to reach their medium-term objectives by, at the latest, 2010," he said.

Posted by MOHAMED SAID at 11:25 AM  

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