Cautioning the euro-zone countries about the contagion dangers of the debt crisis, Jean-Claude Trichet – the European Central Bank (ECB) President – has called on the euro-zone governments to make a ‘quantum leap’ in terms of pooling fiscal governance.

Noting that the euro-zone is experiencing “extreme tensions,” and talking about the danger of contagion, Trichet said during an interview with Germany’s Der Spiegel magazine: “There needs to be major improvements to prevent bad behavior, to ensure effective implementation of the recommendations made by peers and to insure real and effective sanctions in case of breaches.”

Defending the contentious decision of using ECB money for buying the government debt of the worst-hit countries of the euro-zone, Trichet reasoned that the move to pump unspecified billions into the debt markets of countries like Greece, Portugal, and Spain will not cause inflation.

With the euro-zone political leaders essentially blaming the financial markets for the economic quandary, Trichet said that the euro’s crash was largely the responsibility of the governments in Europe, rather than currency traders and speculators.

Referring to the commencement of the credit crunch just more than a week back, Trichet drew a parallel with the situation resulting from the September 2008 collapse of Lehman Brothers; and added that the current crisis is, without doubt, “the worst situation since the second world war, perhaps even since the first.”