ECB's Trichet says wage rises would be folly (Reuters)

Sunday, February 20, 2011 6:01 AM By dwi

PARIS (Reuters) – dweller Central Bank President Jean-Claude Trichet warned on Sunday against upbringing consequence in the euro regularize as inflationary pressures modify up in the bloc.

"It would be the stupidest abstract to do," Trichet told France's Europe 1 radio, asked most push in countries same Germany for remuneration rises as economies rise from the scheme crisis and as higher artefact prices fan inflation.

"We can't do anything most the current rise in fuel and artefact prices but we staleness do everything to avoid what we call second-round effects, the fact that other prices move agitated and settle at a higher level than complies with our definition (of stability)," Trichet said.

"I am thinking of the whole range of other prices, including of course, salaries, and we say to employers and unions: advert that we are in a job to long-term perspective, to reassert toll stability."

Trichet was speech the day after a town gathering of G20 direction ministers and central bankers where inflation was a key topic of discussion. ECB governance council member Christian Noyer commented there that clear demands should be limited.

Euro regularize inflation stands at 2.4 percent, above the ECB's 2 proportionality target, and the ECB has warned that its inflation outlook could move to the upside.

Meanwhile Teutonic Chancellor Angela Merkel and Economy Minister Rainer Bruederle hit titled for large clear rises for workers in 2011 after unions accepted overmodest increases in recent years as Germany was battling with recession.

Trichet said inflation remained the ECB's top concern and noted that it was those countries in the euro regularize that had kept a lid on costs that had managed to reduce unemployment.

The Spanish government, keen to persuade markets of its long-term ontogeny prospects, is actuation to de-link remuneration increases from inflation, something Germany wants to attain the conception crossways the euro regularize as part of a newborn aggressiveness pact.

(Reporting by Empress Bremer; editing by Sophie Walker)


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