Vienna  - European Central Bank Jean-Claude Trichet indicated Monday that the ECB was in no rush to cut rates and that fighting inflation remained its top priority.

Speaking at a conference in Vienna hosted by Austria's central bank, Trichet said safeguarding price stability is and remained a necessary condition for economic growth, job creation and social cohesion.

He said the ECB's governing council believed that "the current monetary policy stance will contribute to achieving our objective of price stability in the medium term and of firm anchoring of medium to long term inflation expectations."

Interest rates have been on hold at 4 per cent in the 15-member eurozone since June last year, despite the global economic uncertainty triggered by the US subprime mortgage market crisis and the push to lower rates by the world's other leading central banks, notably the US Federal Reserve.

Trichet remained confident that the euro-system, through its stability-oriented monetary policy strategy, would be able to stand up to the current challenges and be successful in maintaining price stability in the euro currency bloc.

The ECB's quantitative definition of price stability provided a "clear yardstick" against which it could be held accountable, Trichet said.

"A steady monetary policy course has substantially contributed to stabilising medium to long-term inflation expectations at a level consistent with our definition of price stability, while, at the same time, protecting our economy from the corrosive influence of policy-induced volatility," Trichet told the conference.

Since June, consumer prices in the eurozone countries had been around 4 per cent, well above the ECB's 2 per cent annual inflation target.

The ECB's interventions in the wake of the upheaval in the US mortgage market were not compromising the bank's medium-term policy.

"Liquidity interventions aimed at restoring orderly trade conditions in money markets and maintaining short term interest rate close to our policy rate were not compromising in any respect the longer-term achievement of the price stability or being complacent with imprudent behaviour by market participants," Trichet said.

Rising commodity prices, as well as rises in administered prices and indirect taxes by government demanded the special attention of the ECB, Austrian central bank head Klaus Liebscher said.

Liebscher is also a member of the ECB's 21-head governing council.

A central challenge for the future was the eurozone's enlargement, Liebscher said, stressing that the convergence criteria for the new members must be neither weaker nor stronger than for the existing members of the monetary union.

Trichet said political reform was "essential," as regulatory inhibitions were holding back Europe's economic growth potential in many respects. (dpa)