http://www.guardian.co.uk/business/2010/may/16/european-central-bank-president-warns-crisis-war
Central Bank chief: euro crisis is worst since the second world war Jean-Claude Trichet calls for eurozone countries to make a 'quantum leap' in getting to grips with their economies a.. The Observer, Sunday 16 May 2010 b.. Article history The European Central Bank president, Jean-Claude Trichet, warned this weekend that Europe faces its worst crisis since the second world war as he called for a "quantum leap" from eurozone countries in getting a grip on their finances. With political leaders across the eurozone lining up to blame the financial markets for their economic plight, Trichet said it was Europe's governments that were responsible for the euro's slump, rather than currency traders and speculators. In an interview with German news magazine Der Spiegel, Trichet compared the situation just over a week ago - when markets went into freefall - with the start of the credit crunch. "The markets stopped functioning - it was almost like the situation after the collapse of Lehman Brothers in September 2008." He added that Europe is "undoubtedly in the worst situation since the second world war, perhaps even since the first. We have experienced, and are experiencing, really dramatic times." Financial markets have been on a rollercoaster over the past fortnight. The panic that swept through the markets on 7 May prompted the European Union to hammer out an unprecedented ?750bn emergency support package. For once, investors felt that policymakers had got "ahead of the curve" and responded with a relief rally at the start of the week. Their optimism proved to be short-lived, however, as the realisation sank in that the package did not solve any of the underlying problems. On Friday there was renewed panic selling and the euro slid to an 18-month low against the dollar after reports that French president Nicolas Sarkozy threatened to pull his country out of the single currency to force Germany to agree to the multi-billion rescue plan. Trichet said: "There is always the danger of contagion in the market. And this can happen very quickly, sometimes within a few hours." German chancellor Angela Merkel concurred with Trichet's analysis in an interview with Süddeutsche Zeitung. "The real problem is the big budget deficits in eurozone countries," she said. Merkel called on countries to become more competitive and urged that economic policies in Europe be more closely aligned.
