We don't spend much time with Jean-Claude Trichet, the president of the European Central Bank, and really that's our loss because he is quite the charmer, though less seductive and/or rapey than other French international bankers who come to mind. Last week he sat down with a French magazine for an interview that was released yesterday, and he had a message for anyone who might still want to speculate on Greece defaulting:
Such a speculation would be a sure-fire way of losing money given the decisions taken last Thursday. And let me say again, the euro, as a currency, is sound and credible, and is not affected by the pressures on sovereign risks.
You might ask, how could he be so sure that the holders of the $4.6bn of Greek CDS net exposure still outstanding as of the end of last week would lose money? Well, for one thing, he could arrange it so that the CDS won't get paid out on a Greek default, making it in fact pretty surefire. So he did:
With regard to private sector involvement and Greece, we have had three very clear messages. First, we said that any participation had to be voluntary. As far as this is concerned, our advice has been followed. Second, we said that it was necessary to avoid a “credit event”, and at the moment, it looks as though we have done so.
Check. But don't get the wrong impression about Jean-Claude, whose job demands that he act like a tough guy, but who deep down is really more of the idealistic dreamer type:
Speaking as a European citizen, and not as the President of the ECB, I think that the Europeans will go on to invent in a long term prospective an entirely new type of confederation of sovereign states, which would not be a carbon copy of the United States of America.