the current situation. ftd : do you fear that the euro area countries could fail to get the crisis under control? bis central bankers ’ speeches trichet : no. the countries of europe have always demonstrated that they pull together when the challenges are very high. my strong belief in the continued integration of europe, as a key historical endeavour to ensure stability, prosperity and peace, has not been shaken in any respect by the crisis. ftd : some governments want to beat the crisis by merging national government bonds to create eurobonds. is this a good idea? trichet : the governing council has looked at the various proposals and is not in favour of them at present. what counts now is that we make optimal use of the instruments at our disposal. this includes a quantum leap in the economic surveillance governance of euro area countries. in addition, the adjustment programmes for greece, ireland and portugal must be implemented in a decisive manner. it also means that the european financial stability facility ( efsf ) should be used as flexibly and effectively as it possibly can be. ftd : the stress tests are very detailed in terms of various exposures of the tested banks ( sovereign risk, housing risk, etc. ) some critics fear the stress tests will now lead to speculation against certain banks. do you think this fear is justified? trichet : i welcome the publication of the eu - wide stress - testing exercise, which was prepared and conducted by the eba ( european banking authority ) and the national supervisory authorities. i trust it is an important tool to enhance transparency in the eu banking system. i also support the eba recommendations to promptly remedy the capital shortfall of the banks that do not meet the threshold ratio of 5 % core tier 1 capital ( as of end - april ) and to strengthen the capital position of those banks that are above but close to the threshold. bis central bankers ’ speeches

what does the ecb say to the fact that, in the context of the second package for greece, governments have nonetheless been talking about solutions such as a debt rollover or a partial debt buyback, which could lead to default? trichet : the responsibility for this lies with the governments. the governments have been warned, in no uncertain terms and using all possible means. i have said so publicly. i have explained in detail to the heads of state and government and to the finance ministers, on several occasions, that, if a country defaults, we will no longer be able to accept its defaulted government bonds as normal eligible collateral. the governments would then have to step in themselves to put things right. that would then be their duty. ftd : what does that mean in concrete terms? trichet : in the event of a decision by the governments leading to a selective default or a default, which, again, we are warning against loud and clear, the governments would have to take care that the eurosystem is presented collateral that it could accept. ftd : when it comes to deciding whether a default has occurred, will the ecb rely, as it has until now, on the rating agencies, or might the decision not be dependent on what they say? trichet : again, it is not the working assumption of the governing council. ftd : let ’ s talk about the crisis management of the euro area governments. the heads of state and government and the finance ministers give the appearance of being a chaotic bunch. they often create such a cacophony that it inflames the crisis rather than dampening it. what needs to change? trichet : there is an absolute need to improve “ verbal discipline ”. the governments need to speak with one voice on such complex and sensitive issues as the crisis. it is, of course, complex to take into account the need for sound, shared management of the economic pillar of the economic and monetary union, whilst fully respecting the functioning of the 17 democracies of the euro area. but speaking with one voice in a period of crisis is of essence. and, after all, it is what was possible after lehman brothers at the end of 2008. ftd : some euro area governments have said that chancellor merkel has frequently acted too slowly and has thus made the crisis even worse. is that true? trichet : not in the least. i would see a discussion of this kind as being completely misplaced in