Trichet Phases Out Some Tools, Opposes IMF Help for Greece

By Jana Randow and Christian Vits
March 4 (Bloomberg) -- European Central Bank President Jean-Claude Trichet phased out some of the emergency tools used to fight the financial crisis and said it would be inappropriate for the International Monetary Fund to give help to Greece.
The ECB tightened the terms of its regular three-month market operations and returned to the pre-crisis practice of offering the funds at a variable rate. At its main seven-day operations, the ECB will continue to lend commercial banks as much money as they need at its benchmark rate. The ECB left that rate at a record low of 1 percent today.
"The Eurosystem continues to provide liquidity support to the banking system of the euro area at very favorable conditions," Trichet said. On Greece, he said "I don’t trust that it would be appropriate to have the introduction of the IMF as a supplier of help."
The ECB is trying to mop up excessive liquidity in financial markets without spooking investors concerned that Greece’s record budget deficit will undermine the euro region’s recovery. EU leaders are trying to show they can force Greece to patch up its budget without giving the country financial assistance.
Trichet also said that the ECB’s benchmark rate is currently "appropriate," indicating that the 22-member Governing Council has no immediate plan to raise borrowing costs. The euro slipped 0.2 percent to $1.3648 after Trichet’s comments.