If I compare the euro area – but I think this would also be true for Europe as a whole – with the US, we have public spending as a proportion of GDP that is significantly higher than in the US. We have a social safety net and social protection in general which is more comprehensive than in the US, and hence the role of automatic stabilisers is significantly more important. It represents a much larger part of GDP. An order of magnitude could be that for the same decrease of GDP, you would have perhaps twice as much influence of automatic stabilisers as a percentage of GDP in the euro area as compared with the US. A large level of public spending as a proportion of GDP is not something that we necessarily have to be very proud of, but it is some kind of “amortiser” in periods that are very difficult. FT: In Britain you’re looking at a potential 8 per cent budget deficit next year of GDP, and in America the word is for the next fiscal boost, name a number and go higher. And the doctrine of overwhelming force, the Powell doctrine, will be used to throw everything at this problem. Now, do you see risks in that approach, or are you sympathetic?
When you look at the level of savings as a proportion of household revenue in the various countries, you see to what extent some of them are already largely taking into account the expectation that tomorrow you’ll have to face up to additional taxation and additional financing needs for public funds. FT: In the US, what is really striking about Europeans is that some of them understand that this crisis is so exceptional that in a way you may have to put aside the rules. These are exceptional circumstances. But on the other hand there are other Europeans who just feel that we’ve used so much effort and political will to put together and agree on those rules that whatever we do, we mustn’t abandon them. Now, where do you come down on these two sides of the equation? Trichet: Incidentally, we had an exceptional relationship with the other side of the Atlantic in a large number of areas, including the supply of dollar liquidity. We have had a lot of “premiers” in terms of our own decisions, and “premiers” in terms of the close cooperation and very confident cooperation with other central banks. This is something which is important. But I’m cautious. I take the Stability and Growth Pact as it is, with its provision for exceptional circumstances. But it would be a mistake not to take into account fully the situation of the various economies.