Jean-Claude Trichet outlines his European dream

Jean-Claude Trichet to the right of Jose Manuel Barroso Mr Trichet made the speech as he collected a prize for European integration

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Sometimes in public life a mask slips and for a moment behind those carefully weighed words you sense the real ambition.

It happened yesterday with the head of the European Central Bank, Jean-Claude Trichet.

The candid moment might have been because he was receiving the Charlemagne prize in Aachen for European integration or it may also be that he is nearing the end of his time running the bank.

In his vision, the crisis in the eurozone is an opportunity for a great leap forward towards ever closer union.

He suggests a European finance ministry that would oversee spending by national governments.

"In this Union of tomorrow, or of the day after tomorrow," he said, "would it be too bold, in the economic field, with a single market, a single currency and a single central bank, to envisage a ministry of finance of the Union?"

He recognises that such a 'quantum leap' would need a dramatic political change including a treaty change.

Tighter monitoring

Start Quote

Would it go too far if we envisaged... giving euro area authorities a much deeper and authoritative say in the formation of the country's economic policies if these go harmfully astray”

End Quote Jean-Claude Trichet President, European Central Bank

Although he argued the precise opposite, the speech was a tacit admission that neither monetary union as it currently functions, nor the bail-outs that have followed, are working satisfactorily.

In his view, rules governing spending within the eurozone need to be tightened.

There are already plans for monitoring and peer review but Mr Trichet has in mind something "well over and above the reinforced surveillance that is presently envisaged".

When it comes to countries that have been bailed out but are still failing to get their deficits down he proposes that European officials essentially make the spending decisions on behalf of that country.

"One way this could be imagined," he said, "is for European authorities to have the right to veto some national economic policy decisions".

Question of trust

A vein running through this speech is the belief that governments can't be trusted with spending while officials can.

In this vision citizens and voters don't appear to have a seat at the table.

"Would it go too far if we envisaged," he said, " euro area authorities a much deeper and authoritative say in the formation of the country's economic policies if these go harmfully astray?"

In some cases he sees European authorities taking decisions that would be compulsory for a country to follow.


Now, although some of these ideas were pitched way into the future some officials are already talking about taking decisions on behalf of Greece.

Banner on Athens finance ministry Protestors placed a banner calling for a general strike on the finance ministry building in Athens

Juergen Stark, who is the chief economist at the ECB, says that if Athens didn't take the necessary measures to restore its finances then it might be necessary for other parties to "interfere", as he put it.

"If countries in difficulty do not introduce the necessary adjustment measures," he said, "then interfering in their national policy could be a necessary way of ensuring the correct functioning of monetary union".

There are already daily protests in Greece against austerity measures that many see as being imposed from outside.

The suggestion that European officials might essentially dictate policies would be seen as a fundamental challenge to Greek democracy.

Unappetising change

Trichet's vision would require a change to the treaty. There is little appetite for that amongst member states.

Eight years were spent haggling over the Lisbon Treaty. Treaty change would trigger referenda and, in the present climate, it is not certain that Europe's voters would back more power shifting away from the member states.

It has long been said that you can't have monetary union without fiscal union. And you can't have fiscal union without political union.

Jean-Claude Trichet clearly believes that.

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  • rate this

    Comment number 11.

    Appropriate commetnts for someone receiving the Charlemagne prize but why has he forgotten all of European history since 1789? The Sun King is dead and there have been many revolutions and wars since. The man is a fool which is probably a prerequisite to holding his current position. Vanity, vanity of vanities, all is vanity!

  • rate this

    Comment number 10.

    Such a step as this would need the mandate of the people so Trichet can dream all he likes. I cannot know the result of such a question being posed to the people of Europe. However the way our glorious leaders run from the idea in terror means I can have a good guess at the probable result.

  • rate this

    Comment number 9.

    This would turn into the Eurocrat's worst nightmare: they would have to confront their old enemy head on, democracy. The voters of the Eurozone would give them such a thrashing they wouldn't be able to sit down ever again. Austerity? Just so the greedy speculative creditors get all their money back? J-C T, you jest! 'Haircuts' all round for them.

  • rate this

    Comment number 8.

    For 'ever closer union' read abyss. The first question for anyone who proposes such a policy is just how do they themselves benefit, in his case it is easy to see power as the answer.

  • rate this

    Comment number 7.

    "Treaty change would trigger referenda"

    Anywhere important ? Because if it's Ireland or Denmark they'll get sent back until they get the right result, as they were on Lisbon and Maastricht

    If they want to do it, they'll do it. Hopefully it will only be the eurozone, on its way to being a nation state sans democracy.

    Bit like these Arab states. They can wave travelling in the opposite direction.

  • rate this

    Comment number 6.

    Why should there be surprised that the would be captains of the Titanic and top staff are eager to see completion of its construction as it is sinking? Central all powerful authority with a ruling aristocratic elite controlling all aspects of life because they know fits perfectly with thousands of years of European cultural values.Damned the failure of the USSR, the EUSSR is full steam ahead

  • rate this

    Comment number 5.

    Merkel and Trichet have sung from the same hymn sheet today. A deal with the Greeks has been arranged, requiring more oversight, as exists already in Ireland. The euro will be maintained, the union will be strengthened. Stability and solidity requires federation, fiscal union and political control from the center. The British have played both sides of the Atlantic, perhaps now is the time to go.

  • rate this

    Comment number 4.

    His and euro "elites dream", and the people of Europe's nightmare...

  • rate this

    Comment number 3.

    "a great leap forward"

    An interesting...and I would say appropriate... choice of words.

  • rate this

    Comment number 2.

    So J-C Trichet underlines his dream, the best news was that he was leaving the ECB, an organisation he should never have been in charge off. Why is it that French appointees or nominees to the ECB and IMF always seem to be under investigation, Trichet was, DSK is and Lagarde is it seems. Just what is the common factor here.

  • rate this

    Comment number 1.

    The people of Europe will never agree to this.

    So it is a certainty......

    There is a bug on these pages, I keep seeing dates in the format ζ˜ŸζœŸδΈ€, 30 5月 2011


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