jean - claude trichet : interview in expresso interview with mr jean - claude trichet, president of the european central bank, in expresso, portugal, conducted by mr joao silvestre, 24 april 2010. * * * are we really leaving the crisis behind or are there still some risks ahead? is there a risk of a double dip? as regards the conjuncture in the real economy, what it is clear is that on the global level we are in a recovery mode. that is particularly visible in the emerging countries, in emerging asia especially but and also in brazil and in latin america. the emerging world is picking up now very clearly and that is excellent for global growth. as regards the financial sector and financial aspects of the global economy, i would say that there is still of course very hard work for drawing all the lessons from the crisis. we have to be sure that we have a global financial system which would be much more resilient than it was before the crisis. it is work in progress. it is the work we have started in the auspices of the g20, the work that we are doing with the financial stability board, with the basel committee, with all the workshops that have been established at a global level. for the banks, we will have decisions by the end of the year on the capital requirements, new rules and regulations at a global level. we are bound to learn the appropriate lessons and to pave the way for a global financial system which should be much more solid. we cannot afford to have twice the same acute degree of instability. for several reasons, i think people would not tolerate that. our democracies have accepted a level of taxpayer risk that has been extremely elevated to avoid the collapse of financial sector. i do not think they will accept that twice. what are the main risks in your opinion? still the financial system? we always have risks in a market economy. there was no risk in the soviet economy, but this absence of risk led the economy to a total collapse. in a market economy, you have to permanently identify and analyse risks, you must have the best risk management possible to be sure that you prevent the materialization of risks both at the level of individual institutions and at the systemic level itself. in the present moment, we still have all the risks associated with the fact that we have not yet achieved the work that we started at the end of 2008 and have not yet drawn all the lessons from the crisis.

up the discussion with the private sector. the basel committee is gathering all the responses from the industry that were due by the end of april. we will work intensively, at the level of the international community, on the appropriate calibration of the new basel rules. you think that the exit strategies of the fiscal policy, namely in some countries higher deficits like ireland, portugal or greece, are in themselves threats to the economic recovery? we in the ecb governing council have always defended fiercely the stability and growth pact ( sgp ). we have always drawn the attention of the governments to the fact that the sgp was essential and crucial for the economic and monetary union ( emu ). for all governments, the sound management of fiscal policies is essential, not only because they are part of the emu, not only because it is both moral and common sense behaviour to protect the children and the grandchildren and not to impose on them an abnormal burden, but also because it is a crucial element in of the confidence of the households, entrepreneurs and market participants. that is the reason why we see no contradiction between the objective to permit the economic recovery to expand and be active as possible, and the sound management of fiscal policies. but governments should be careful on the pace of fiscal tightening to avoid risks? governments should be aware of the fact that if they do not do what is necessary to be credible in having a sustainable fiscal position in the medium term, they will not create confidence. if they do not create confidence in their capacity to run sustainable fiscal policies they will not help the recovery today. because the recovery today depends crucially on the confidence of households, of fellow citizens and of enterprises. do you think portugal could experience in the future a situation similar to greece if the government fails to accomplish stability and growth program and bring the deficit to a level below 3 % of gdp? the countries are all in very different situations. that being said all governments of the euro area, without exception, have the task to be credible in the sustainability of their fiscal policies. it is our permanent message. you know for some time our finance minister, teixeira dos santos. he was able to cut fiscal deficit between 2005 and 2008. is he the right person to do it again right now? it is not the responsibility of the ecb to give good marks and bad marks to finance ministers! all what goes resolutely and courageously in the direction of sound fiscal policies and improvements in the cost competitive