PARIS (AFP) -European Central Bank head Jean-Claude Trichet rose to the defense of the euro Friday, describing it as a “credible” currency that was not in crisis.
“I think that we have to see that we have a currency that is credible,” Trichet told RTL radio a day after the ECB backed an extension in special measures to tackle eurozone debt pressures.
“There is no crisis for the euro as a currency.
“We have problems of financial instability that are the result of budget crises in certain European countries.”The bank on Thursday left its key interest rate at a record low of 1.0 percent but said it would extend cheap emergency funding for the commercial banks through the first quarter of 2011.
Crucially, the ECB also said it would continue to buy government bonds to help ease pressure on a growing list of financially vulnerable eurozone countries -- Belgium, Greece, Ireland, Italy, Portugal and Spain -- but gave no indication it would increase its purchases.