jean - claude trichet : interview with yediot ahronot interview of mr jean - claude trichet, president of the european central bank, conducted by sefy hendler, yediot ahronot, on 31 march 2006, published 11 april 2006. the publication of the interview was authorized by yediot ahronot. * * * is there a trade - off between price stability and growth? jean - claude trichet : “ price stability is a necessary condition to ensure sustainable growth and job creation. otherwise, we would not have the positive financial environment that would allow a sufficient and ongoing level of growth to be maintained. i believe that governments and public opinion are understanding this more and more worldwide, certainly in the euro area too. i do, therefore, believe that we are in an environment where public opinion understands that when price stability is maintained – which our fellow citizens are strongly calling for – one is also contributing to sustainable growth. ” do you think that when politicians criticise you ( when the ecb raises interest rates ), they are doing their job? jean - claude trichet : “ i think that, not only in europe but also at a global level, it has been more and more clearly understood that price stability is better ensured and, therefore, by way of consequence, sustainable growth and job creation better achieved when the credibility of central banks is very strong and solid. in this perspective, remarks weakening the credibility of monetary policy are globally much less frequently observed. ” does the european central bank ’ s president understand that the currency he manages has acquired the image of an excessively strong currency, making prices for visitors to the euro area more expensive? “ no ”, replies trichet without hesitation. “ we have, indeed, maintained price stability. we are credible in the eyes of investors and savers worldwide as far as our ability to maintain that stability is concerned. our currency is credible and inspires confidence. ” trichet prefers to see the stunning success of the euro, which almost overnight has become a credible currency trusted by the financial markets. “ there were many sceptics concerning the euro, concerning the euro area or generally concerning the ability to create the euro and sustain it as a credible currency ”, he says, and adds with satisfaction “ the facts have demonstrated that those sceptics were wrong ”. and still, what appears to be the most problematic aspect of the monetary union you are heading is its political unity. in recent years we have witnessed the

the unified europe continues using a clause that allows it to remain outside the euro bloc, will this not hamper the union in the short and medium term? is this not an ongoing problem for those 313 million citizens of the euro bloc? jean - claude trichet : “ i would draw your attention to the fact that 313 million citizens, even without the united kingdom, is still a little bit more than the united states. personally, i am convinced that the united kingdom will one day join the economic and monetary union because it is in its interests to do so. of course, the decision will be taken by the people of the united kingdom themselves, by way of a referendum. i am convinced of the sincerity of the uk prime minister, who did not conceal the fact that, in his opinion, it would be in the united kingdom ’ s interests to enter the economic and monetary union when the time comes. ” is the first employment contract a necessity for france? jean - claude trichet : “ we do not make judgements on individual measures. i can say that from an economic perspective and from that of the fight against mass unemployment, it is clear that moving towards greater flexibility is moving in the right direction. ” there are those who ask themselves whether france is capable of change at all and capable of implementing any reforms. jean - claude trichet : “ i certainly believe that france, like all european countries, can implement reforms. it has changed profoundly in the last 20 years. but i also think that france, like others in europe, is implementing reforms too slowly, and reform at a slow rate has an associated price. in the world we live in today this has a heavy price. the world nowadays changes very, very, very fast given the challenges of science, technology and globalisation. ” is the wish to see rapid change in france no more than a utopia bearing in mind the current situation? jean - claude trichet : “ i think that the characteristics of each and every country are of course linked to its history. what characterises france historically is slow change over long periods of time, alongside very rapid changes in relatively short periods of time. if we look at the euro area as a whole, then clearly that situation would also be much better if it were to embark on the reforms more quickly. ” do you think that the israeli economy is attractive enough for the europeans today? jean - claude trichet : “ i believe that the israeli economy is definitely a significant one, thanks in particular