Here is an unimpressed Jean-Claude Trichet.
And here is the ECB’s full response to the revelation of the Trichet letter…
Apart from that letter to former finance minister Brian Lenihan on 19 November 2010, about the emergency liquidity being pumped into Irish banks — look at the oneLenihan sent to the ECB president on 4 November 2010.
In October Trichet had already threatened warned that ELA “should not be taken for granted as a long-term solution” for financing the banks without Ireland entering a programme. But Lenihan wants to talk about the way German and French leaders had just suggested sovereign debt should be written down in bailouts, in the October ‘Deauville declaration’ that infuriated Trichet:
This has probably long since been forgotten by most as a footnote of the eurozone crisis. Sovereign default soon became anathema to euroland politicians. In late 2010, even Greece would have another year to stagger on without restructuring. However Deauville did blow up bond spreads, including Ireland’s — made worse when clearing houses began to demand higher margins on trading. That would have infuriated Trichet all the more.
Lenihan asks Trichet to “continue to use your influence to help calm markets” — it isn’t clarified what influence would mean.
The Irish programme came in short order anyway.
Late 2010 was a complex moment in the eurozone crisis, for banks and sovereigns, is what we’re saying.
Anyway. The ECB says it has “honoured the European Ombudsman’s call” for letters to be released. So you can thank this campaign by the The Story for what you can read today.
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