* ECB can trigger exit process when needed
* Government debt, deficit levels worrying in some countries
* ECB happy with impact of non-standard measures
* Trichet declares excess FX volatility the enemy
By Marc Jones and Sakari Suoninen
FRANKFURT, Oct 15 (Reuters) - European Central Bank President Jean-Claude Trichet stressed there should be no doubt about the bank's ability to reverse its current crisis-fighting measures and labelled excessive swings in currency markets as an enemy.
He also pushed governments to plan their own strategies to phase out stimulus measures at the same time reassuring about the ECB's desire to reel in its support.
"As the situation normalises, the non-standard measures need to be phased out, and the substantial policy stimulus must be withdrawn."
"When the appropriate time comes, there should not be any concern about the ECB's ability to exit," Trichet added.
The ECB has provided banks with unlimited liquidity injections since early in the crisis, slashed euro zone interest rates to a record low of 1 percent and has also embarked on a programme to buy 60 billion euros worth of covered bonds.
Asked about the recent slide of the U.S. dollar Trichet responded "excessive volatility is an enemy from the standpoint of stability and prosperity of the global economy."
Pressed on whether he thought U.S. policymakers were actually pushing for a stronger dollar or whether recent comments were merely empty words, Trichet said, "I trust them to respond very clearly."
He also sent a warning to euro zone governments with spiralling debts and budget deficits.
"The debt and budget deficits of a number of euro area governments have reached worrying levels," he said at a conference on Thursday.
Trichet repeated his recent message that it was too early to declare the financial crisis over and too early for the ECB to remove its support. But he said the ECB was happy with the positive impact its crisis-fighting measures have had.
"On the whole, we are satisfied with the results of the non-standard measures we have taken. Our decisions on interest rates and liquidity have been transmitted reasonably well to the rest of the economy," he said.
The ECB chief repeated that current interest rates were "appropriate", he also said that it was realistic for the 16-country to see a slow and steady recovery from recession.
"We have halted the freefall in economic activity that we witnessed around the turn of the year. There are reasons to believe that a gradual recovery lies ahead. But the uncertainty surrounding this outlook remains high," Trichet said. (To see highlights of Trichet's comments please click [ID:nLF587849]) (Reporting by Sakari Suoninen and Marc Jones; Editing by Toby Chopra)