European Central Bank: Press conference – introductory statement Introductory statement by Mr Jean-Claude Trichet, President of the European Central Bank, and Mr Vítor Constâncio, Vice-President of the European Central Bank, Frankfurt am Main, 13 January 2011. *  *  *  Ladies and gentlemen, the Vice-President and I are very pleased to welcome you to our press conference. Let me wish you all a very Happy New Year. I would also like to take this opportunity to welcome Estonia as the seventeenth country to adopt the euro as its currency. Accordingly, Mr Lipstok, the Governor of Eesti Pank, became a member of the Governing Council on 1 January 2011. Following the adoption of the euro by Estonia there are now 331 million citizens using the euro as their currency. We will now report on the outcome of today’s meeting, which was also attended by Commissioner Rehn. Based on its regular economic and monetary analyses, the Governing Council confirmed that the current key ECB interest rates still remain appropriate. It therefore decided to leave them unchanged. Taking into account all the new information and analyses which have become available since our meeting on 2 December 2010, we see evidence of short-term upward pressure on overall inflation, mainly owing to energy prices, but this has not so far affected our assessment that price developments will remain in line with price stability over the policy-relevant horizon. At the same time, very close monitoring is warranted.
More recently, wide publicity has been given to Chapter 11 of the United States Bankruptcy Code which allows a debtor to continue its operations under a re-organization plan. Similarly, the Indian government initiative in the form of Sick Industrial Companies (Special Provisions) Act was passed with the objective of ensuring timely detection of sick and potentially sick industrial companies, to expedite the revival of potentially viable units and closure of nonviable units is noteworthy. We are informed that India is also re-examining the provisions of this law. The prevailing labour laws and parate execution powers make it difficult for financially troubled enterprises to restructure and continue business operations. The exercise of parate execution powers lead only to closure of enterprises, although the law provides for restructuring. The purchase of the mortgaged properties by the bank at the auction sale through the exercise of rights of parate execution has resulted in another undesirable phenomena, that is the accumulation of foreclosed assets on the balance sheets of banks. Undoubtedly, the closure of enterprises results in great cost to the economy by way of loss of output, loss of employment, defaults to creditors and low return to entrepreneurs. It is therefore, vital to have a sound procedure in place to assist ailing enterprises to overcome their problems, provided the enterprises are commercially viable and the problems are of a temporary nature.