ROME (MktNews) - Bank of France Governor and European Central Bank (ECB) Governing Council member Jean-Claude Trichet on Friday stressed the importance of eurozone inflation returning below 2% in the interests not only of price stability, but also consumer confidence and growth.
Speaking at an economic conference, Trichet said: "household confidence, essential for growth, has evolved parallel to (household's) conviction that their purchasing power will be preserved, thanks to the return of inflation below the 2% threshold."
Trichet is the second ECB council member to emphasize Friday the importance of bringing inflation below 2%.
Earlier, ECB board member Tommaso Padoa-Schioppa said that an ECB rate cut is "harder to imagine" with annual eurozone inflation running above the central bank's 2% price stability ceiling.
Trichet underlined the "very important point" that the ECB "by assuring price stability, in accordance with its mandate, consolidates the conditions for robust growth in Europe."
"The balance of (inflation) risks appears more balanced today than at the end of last year; but we naturally remain vigilant," Trichet continued. "The calm vigilance of the ECB and the Eurosystem is a decisive asset for confidence and therefore for growth in Europe."
Despite the recent negative growth developments in the United States and Japan, "the eurozone economy has held up well up to now," Trichet said. Looking ahead, the ECB "is convinced that on the basis of our information, eurozone economic growth should remain robust in 2001 and should be significantly above that of the United States."
"This view is shared by many international observers, in particular the IMF, which believes that the gap between European and U.S. growth will favor Europe by one percentage point" this year, he said.