Trichet Backs Paulson's Bailout Plan

European Central Bank President Jean-Claude Trichet said on Friday the U.S. government's $700 billion bank bailout plan must be passed and urged EU governments act swiftly to contain the crisis.

The U.S. House of Representatives is expected to debate the plan on Friday and then put it to a vote. The Senate has already passed the bill.

"(U.S. Treasury) Secretary (Henry) Paulson's plan obviously must be passed. It must be. It is necessary," Trichet told Europe 1 radio. "We must do everything to preserve the unity of the Europeans," he said.

Trichet will attend a meeting in Paris on Saturday with the leaders of Italy, France, Britain and Germany to discuss the EU reponse to the crisis ahead of a full meeting of G8 leaders later in the year.

"I called on the governments to be as reactive as possible," he said.

((Click on the video to the left to view Trichet's exclusive interview to CNBC))

ECB Executive Board Member Lorenzo Bini Smaghi said in a newspaper article governments should intervene immediately and substantially in case of market tensions in the banking sector.

He also said it was better for governments to buy direct stakes in troubled banks rather than adopt a U.S.-style rescue package.

"It is not right to use taxpayers' money to save banks which made chunky profits in the past," he wrote.

"So public intervention should not mirror rebuying junk assets of banks like in the initial U.S. model." The ECB kept rates at 4.25 percent on Thursday but opened the door for its first rate cut in more than five years, saying inflation risks had eased as financial market turbulence hit the euro zone economy.

"For the euro zone as a whole, the European Central Bank's experts tell us that we have reduced growth ... with significant risks that growth will be even weaker," Trichet said on Friday. "We are in a universe that is uncertain."

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