- "“Do not underestimate the eurozone” was the message that Mr. Trichet sent in today’s press conference. It was a message carefully calibrated to instill confidence without sounding too optimistic, and it was exactly the right message to send at the current juncture."
- "Over the last couple of months, fears of a double-dip recession have at times escalated into needless scaremongering that risks undermining already fragile business and consumer confidence, as well as popular support for much needed fiscal and structural reforms."
- "Trichet noted that economic activity indicators in no way justify fears of a double-dip recession, and that if anything European growth is providing positive surprises compared to
excessively low expectations; he went on to stress the importance of fiscal sustainability and structural reforms to ensure robust sustainable growth in living standards. He also argued that many market participants had underestimated the ability of EU and national policymakers to take very difficult decisions, ranging from the EUR440bn stabilization fund to the national fiscal consolidation plans, and that confidence seems now to be gradually returning as investors price in the full import of these policy decisions. He underscored that bank stress tests should now be carried out in the right way and followed up with appropriate steps to strengthen banks balance sheets where needed, but overall sounded guardedly
optimistic that this would indeed happen."
- "I also believe that recent decisions by some individual governments suggest that they might
have acknowledged that courageous steps are needed—Spain is probably the most encouraging example. The next few months will tell us whether governments have the determination to push ahead with reforms. But the publication of the banks stress tests is now
the make-or-break challenge for the eurozone, a one-shot opportunity to clean up the banking system, bolstering balance sheets and investor confidence. If this is done right, Europe should
be able to dispel once and for all fears that a Japanese-style lost decade might lie ahead."
Unicredit Market Sense 20100708

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