The European Central Bank has a big problem in its hands and it originates from the United States, a former president of the central bank told CNBC Friday.
The growing strength of the euro – which recently broke the $1.20 benchmark – is raising questions about the future of monetary policy in Europe. It's the ECB's aim to raise core inflation but a strong currency hinders that aim. According to the former president of the ECB, Jean-Claude Trichet, the bank is in a difficult position given that the core of the problem comes from the U.S.
"There are a lot of factors (for the euro's strength). The real economy in Europe is picking up now very, very visibly," he said about the attractiveness of the euro.
"That being said I think that the U.S. difficulty and particularly the hesitation on what to do as regards (with) new investment, as regards (with) taxation and so forth - and the difficulty of the present (U.S.) administration are playing also an important role. Because the problem is more that the dollar is weak vis-à-vis all currencies (rather) than the euro is very strong vis-à-vis all currencies," Trichet told CNBC at the Ambrosetti Forum in Italy.