are you happy with their progress in taking these steps? or do you think they have a lot left to do? mr. trichet : there have been many measures taken by financial institutions in the various market places, including the issuance of new stocks, which we consider good for the resilience of the banks and encouraging because it proves that the market is recovering. but a lot remains to be done to be sure that our banks as i said are fully able to do their job, which is to finance the real economy. credit demand is obviously still very weak because of the sharp recession which ended only a few months ago. so it is not surprising to see the outstanding loans to the non - financial corporate decreasing somewhat. but we must eliminate, as soon as possible, all remaining abnormal supply of credit constraints. question : do you worry that the global economy has become bubble dependent for growth, leading to crises? mr. trichet : i have been myself involved personally in numerous financial crises since the beginning of the 1980s : in particular the sovereign debt crisis in latin america, in africa, in the middle east and in the soviet union. as paris club president at some point in the time in the 80 ’ s i had to deal with around 55 countries that were in bankruptcy. the perception in the west was that it was not dramatic because the industrialized countries were not directly touched, but, as you can see entire continents were very heavily financially hampered. in the 1990s we had the burst of the mexican, the asian, the russian crisis, – again in the emerging countries – and in the industrialized world the ltcm crisis and the tech bubble explosion. then after this succession of very demanding episodes we have the present financial crisis, which started at the heart of the financial markets of the west. this was the first real test for two new entities, which are the integrated global financial system and the integrated global economy. those entities are in particular the product of the conversion to market economies of all economies in the world and of the remarkable advances of technology, in particular information technology ( it ), but not only it. the least we can say that this first real stress test of global finance has demonstrated a fragility that is absolutely unacceptable. we have to correct it. question : when central banks recognize that a bubble is developing should they take corrective action to pop it before it becomes a big problem by raising rates? mr. trichet : no central bank today will say that central banks should

strong anti - euro movement in portugal, there is a growing current of opinion which says, : “ ok, we made all these political and economic efforts but are still paying high interest rates. it is very difficult to see where all this will end so perhaps it would be easier to leave the euro ”. a – sure, i understand. but i ’ m not sure it would be easier. the omt was an instrument created to address what we call “ the break - up fear. ” q – do you think the break - up fear has disappeared? a – yes, absolutely. i think the break - up fear has disappeared, which is a very positive result. what is now important is the credibility of reforms. i think portugal is on the right track. of course the risk premium remains high, because the risk is still high. but i think that this domestic adjustment must – to the extent possible – continue in a balanced way. bis central bankers ’ speeches q – when we look at europe – and we will have european elections in may – we can easily see that some political parties in greece, italy or even the uk or germany and the netherlands – not in portugal, but... – there are anti - euro politicians who are doing well in the polls. a – what we learned from the crisis is that we have an unfinished monetary union. a monetary union that seemed to work well in good times, but in harsh times we saw that the institutional mechanisms didn ’ t work well. there was no crisis preparation, no good crisis management, no joint supervision – many things were not in place before the crisis. that ’ s what we ’ re doing now. so the solution, if i may say so, is not less europe – this would have drastic consequences on the domestic market – but the opposite : what we need is more europe. the crisis showed that what failed were the unfinished institutions within the monetary union. that ’ s what we ’ re building. the banking union is an example. for portugal in particular, i think that it is very good news that we are talking about the end of the current adjustment programme, with or without a precautionary programme. the key is to convey this message of credibility that portuguese politicians – not just the government – continue to support reform. i know it ’ s not easy and i know that the european elections may have to deal with anti - european movements. nevertheless, i think that the vast majority of european parties have come to