european central bank : press conference – introductory statement introductory statement by mr jean - claude trichet, president of the european central bank and mr lucas papademos, vice - president of the european central bank, frankfurt am main, 7 february 2008. * * * ladies and gentlemen, the vice - president and i are very pleased to welcome you to our press conference. let me report on the outcome of our meeting, which was also attended by commissioner almunia. on the basis of our regular economic and monetary analyses, we decided at today ’ s meeting to leave the key ecb interest rates unchanged. this decision reflects our assessment that risks to price stability over the medium term are on the upside, in a context of very vigorous money and credit growth. the current short - term upward pressure on inflation must not spill over to the medium term. the firm anchoring of inflation expectations over the medium and long term is of the highest priority to the governing council, reflecting its mandate. against this background, the governing council remains committed to preventing second - round effects and the materialisation of upside risks to price stability over the medium term. as the reappraisal of risk in financial markets continues, there remains unusually high uncertainty about its overall impact on the real economy. while the economic fundamentals of the euro area are sound, incoming data have confirmed that the risks surrounding the outlook for economic activity lie on the downside. we will continue to monitor very closely all developments over the coming weeks. allow me to explain our assessment in greater detail, starting with the economic analysis. the latest information on economic activity around the turn of the year points to a more moderate pace of growth in the euro area than the quarter - on - quarter rate of 0. 8 % observed in the third quarter of 2007. this assessment is in line with indicators for business and consumer confidence which, while having declined over the past few months, overall remain consistent with ongoing growth. looking ahead, while the slowdown in the economies of some of the euro area ’ s major trading partners is likely to have an impact on euro area real gdp growth in 2008, both domestic and foreign demand are expected to support ongoing growth. this assessment is broadly in line with available forecasts from private and public - sector sources. the fundamentals of the euro area economy remain sound. the euro area economy does not have major imbalances. profitability has been sustained and unemployment rates have fallen to levels not seen for 25 years. as a result of

the bank of greece, had been warning that the greek economy was vulnerable and if the large public and external deficits were not restrained, a severe crisis was unavoidable. they had also put forward concrete policy proposals and structural reforms that – if adopted – could have changed the course of events. the warnings however were not heeded and successive governments continued borrowing and spending, bringing the economy to the edge of disaster when the international crisis broke out. in general, governments in greece are reluctant to accept outside expertise and they perceive the available supply with distrust. the reasons behind this attitude lie in the fierce partisanship of greek politics. the political system is based on confrontation that breeds strong distrust for the “ other ”, leaving no ground for independent voices. the term “ technocrat ” carries derogative connotations and it is definitely considered inferior to the “ political ”. independent proposals and / or technical expertise are not judged on their merits, but on their perceived position in the political spectrum. the preference for “ political ” decisions, as opposed to “ technocratic ”, is ever present in greek politics and reflects an ideological system that gives precedence to the “ political ”, over all other considerations. this is clearly indicated by the methods greek governments recognize the need for external knowledge and use it in their policy planning. the first method is by hiring individual experts as advisors and consultants to the ministers. the fact however that all of them leave their positions together with the government that hired them reveals a basic problem. a relevant case is the chairman of the council of economic advisors, which is the body of economic experts in the ministry of finance that participates vigorously in the formulation of economic policies. the chairman of the council is usually a prominent economist, but the person changes with every change of government. i would say also with ministers of the same government. panos tsakloglou can confirm that. when i left, the minister who succeeded me, changed panos as well. the position is termed political, meaning that academic excellence is not the sole criterion for the choice of the head. another example of this practice is the appointment of university professors as ministers or in other high positions. governments in this case do want the input from outside, i. e. the professors ’ knowledge, on the condition that this knowledge is politicized. a second method governments use in order to acquire expertise from external sources is by setting up extra parliamentary committees of experts to study and suggest policy guidelines on major issues. the participants