Trichet ECB: rich countries must fix finance

Basel, Switzerland - rich countries such as the United States, the Japan and Britain need to move quickly get their deficits under control, the head of the European Central Bank, said Monday.

Speaking on behalf of the major central banks, Jean-Claude Trichet, said financial situation of Governments in the developed world "has be improved aggressively."

Rich countries saw debts and deficits increase due to the financial crisis, recession and bank bailouts. In Europe, the Greece, the Ireland and Portugal have needed loans from international relief to deal with their debt crises.

"The fiscal situation, especially in the advanced economies, is an issue that is important, with regard to the global economy," Trichet said.

"It's true for everyone, including of course in Europe", he added.

Central bankers top meeting at the Bank International Settlements in Basel, Switzerland, agreed that the global recovery is firmly underway despite "high and low," said Trichet, who chairs the group.

In addition to deficits, the main risks are volatile oil prices and the economic potential of overheating in developing countries.

High energy prices are likely to worsen inflation, he said, and Governments and central banks should be in custody. The European Central Bank has already begun increasing interest rates, moving its rate of key to 1.25% of 1% in April to avoid a price spiral / wages in Europe. The euro-zone inflation reached an annual 2.8%, above the objective of the Bank of a little less than two per cent.

The Federal Reserve and the Bank of England have not yet begun climb rate of depressions Records, a step which would be intended to prevent the deterioration of inflation.

Volatile oil "has a direct impact on inflation in the CPI, anywhere in the world" said Trichet, using the acronym for the price index. "Calls to avoid second-round effects and to anchor solidly inflationary expectations."

He said all central bankers have been "concentrated on firmly anchoring inflation expectations."

Another concern was overheating in some emerging countries. The bankers advice was he declared to cool savings now rather than wait for growth become a bust.