Trichet: ECB remains prudent and cautious over economy

President of the European Central Bank Jean-Claude Trichet called on Wednesday for prudence and cautiousness as regards the economic crisis.

''We never declare victory (on the economy),'' Trichet told a news conference at a Euromed meeting of central bankers from the euro zone and countries surrounding the Mediterranean Sea, taking place in Paphos, a coastal city in the southwest of Cyprus of Cyprus.

''Even if we had good surprises, we remain very prudent and very cautious”, he said.

Trichet also said it was not clear which would be the best way to proceed for southern Mediterranean countries in regard to their foreign exchange rates.

''There is no quick fix, there is no solution which is the best in the world.''

Trichet said that in the present period there is more volatility as regards the pressure on exchange rates as perhaps in the period before.

He also said he had nothing to add to the ECB's position on proposals to change the European Union's budget rules.

The new EU budget rules are tougher than the current ones, with new and faster sanctions, but the sanctions will be less automatic and require more political will than the initial proposals of the Commission and ECB called for, he added.

Trichet noted that he does not fully support them.

President of the European Central Bank was welcomed by Cyprus Central Bank Governor Athanasios Orphanides who said is a great honour for Cyprus to host the sixth High Level Eurosystem seminar with Mediterranean Countries' Central Banks.

The seminar will continue tomorrow October 28, in the presence of Governors and officials from the Eurosystem Central Banks, as well as from the Central Banks of southern and eastern countries of the Mediterranean, namely, Albania, Algeria, Egypt, Israel, Jordan, Lebanon, Libya, Mauritania, Morocco, the Palestinian Authority, Syria and Tunisia, as well as officials of the European Commission and the European Investment Bank.