Carmignac attack on Trichet published – at a cost

Edouard Carmignac, founder and president of Carmignac Gestion, is likely to have spent hundreds of thousands of euros to get across a message criticising ECB policy and particularly its outgoing president Jean Claude Trichet.

On 5 October Edouard Carmignac, Carmignac Gestion’s founder and president, attacked the economic policy decisions of outgoing president of the European Central Bank (ECB), Jean Claude Trichet.

Carmignac placed four full page printed advertisements in leading European newspapers the Financial Times, Le Figaro, Le Monde and El Paìs to express his disapproval and demand Trichet make amends at his final ECB council meeting held on 6 October.

With a full page advertisement in the first section of the Financial Times costing up to €114,000, Carmignac is likely to have spent hundreds of thousands of euros to get his message across.

The letter


Dear Sir,

Farewell, you certainly won’t be missed! During your career you will have dealt a fatal blow to the French industry with your strong franc policy in the 90s, deepened the impact of the 2008 crisis by underestimating its scale and, more recently, endangered the euro with ill-considered rate hikes and clearly inadequate support for the debt of weakened European countries.

Tomorrow, you will chair the ECB council meeting for the last time. This will be your last chance to leave on a positive note. May I thereby bring forward the following proposals for your consideration:

– cut the ECB’s key interest rate to zero. Immediately lowering the entire eurozone interest rate’s burden by 1.5%, would provide a welcome boost, in particular, to the weakest member states. It would also have the advantage of helping to fight the euro’s overvaluation, which has been crippling exports for nearly five years.

– make a declaration of intent to purchase unlimited amounts of distressed countries’ sovereign debt without sterilising these interventions. To prevent any abuse, you could enforce that once the Bank’s total purchases exceed a given percentage of a country’s GDP, the country concerned would be required to follow an IMF structural adjustment programme. Giving the ECB a heightened role on the sovereign debt market would solve two major problems. It would give weakened countries renewed access to markets on non-prohibitive terms. Also, it would relieve European banks of the more than problematic need for massive, immediate recapitalisation, required by the depreciation of their sovereign debt holdings.

Finally, whatever the monetarists may claim, the liquidity created through these interventions would not be inflationary. It would merely lessen the strength of the powerful deflationary forces generated by widespread deleveraging, while also exerting downward pressure on the euro. But wouldn’t a weak euro be preferable to no euro at all?

The situation is serious and calls for immediate action. The vicissitudes of the European construction imply that neither politicians nor any institution but the ECB is in a position to act decisively. Hence, the formidable task of filling this role is yours.

I sincerely hope that the zealous civil servant we all know will reveal himself a true statesman.

Yours faithfully,

Edouard Carmignac




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