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 31.

    25"Makes you wonder why millions of people would give their right arm to live here!"

    As Europeans flee to the US and Canada, they're being backfilled by South Asians, Africans, Chinese.All that bragging about how great the EU is got you other countries' tired poor huddled masses. Deal with it.Put them on welfare.Germany will pay.Their export economy is booming.

  • Comment number 30.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 29.

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

    That's the Europe I've come to know and love.If something clearly doesn't work, meet in emergency session to be sure you do more of the same.Isn't that how WWI was fought?They all just kept pouring more lives into no win battles.Mindless.

  • rate this

    Comment number 28.

    "Makes you wonder why millions of people would give their right arm to live here!"

    Only an hour ago I saw gen. Ratko Mladic raise (in a mock salut) his right arm, which only a day earlier he and his lawyers claimed - was paralyzed.

  • rate this

    Comment number 27.

    "The central goal of European Union is peace. [...]
    Peace must prevail through union."

    Except it wasn't and is not EU which prevented Europeans from slaughtering each other again in the last 60 years.

    It was NATO [read: U.S.A.]

  • rate this

    Comment number 26.

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

    Just as defeat of Nazi III Reich and Japanese Imperium created a perfect opportunity for creating democratic, pacifist Germany and Japan.

    [Courtesy of gen. gen. Marshall and McArthur]

  • rate this

    Comment number 25.

    24 Crystal Ball
    Makes you wonder why millions of people would give their right arm to live here!

  • rate this

    Comment number 24.

    The Euro is in tatters, the fishing policy dumps a million tons of dead fish back into the ocean annually, the land fill directive spreads poison over the land and the (bio fuel) energy policy will end up starving us all! The EU has totally failed the people because it was designed to hand power into the hands of the unelected few and enslave the rest, as far as I can see!

  • rate this

    Comment number 23.

    Trichet's dream is that of EU bureaucrats. It has nothing to do with what EU citizens want, and in an ideal EU world they would never get a say.

    Trichet knows that the political problems are insurmountable. Almost certainly this would be vetoed by German constitutional court and that is ignoring those countries that would have a referendum.

  • rate this

    Comment number 22.

    Trichet's dream is also a red herring. A single currency zone will never work effectively unless there is actual large scale movement of people from poor areas to rich and large scale wealth transfer from rich areas to poor. Neither are politically accpetable in most north European countries

    If Greece was to default on its debt that would be in effect a wealth transfer.

  • rate this

    Comment number 21.

    Trichet's dream (= old French one) has been refused by the German minister of Economy at once by stressing the national responsibility
    for Financial politics.

    Of course, countries who failed and need help have to accept certain conditions. But I wouldn't call that "interfere" as Jürgen Stark does.

    Finally, the Treaty should be changed to allow to kick those off the eurozone if not to avoid.

  • rate this

    Comment number 20.

    16. BluesBerry

    If Trichet recommends an EU finance ministry then it's what his paymasters want not what is good for the EU's population. His track record explains where he sits very well and if what he recommends were to happen you can be certain he and his paymasters will reap the benefits only.

  • rate this

    Comment number 19.

    cedallion makes a key point here: the EU is not democratic in any way.

    Legislation, in the form of Directives, is produced by the Commission and Council of Ministers, both appointed. The EU Parliament has no such powers and can only veto the occasional Directive.

    Interestingly: the longest an MEP can speak on any given subject is 90 seconds.

    The EU is a dictatorship and nothing else.

  • rate this

    Comment number 18.

    Why is there a silly limit on words. is this a tweeting blog or a serious debate. It’s getting similar to a brussels platform for restricting speech.

  • rate this

    Comment number 17.

    I have long thought that the crisis in the Euro area was not only forseeable but planned. Only an idiot could have thought that countries as diverse as Germany and Greece could share a currency successfully.

    By intentionally creating this crisis the EU has achieved its objective of moving towards control of the economic policies of, first those countries that are failing, then the rest.

  • rate this

    Comment number 16.

    Dear fellow commentators,
    Forget the need for a new treaty, forget the need for another vote.
    Ask only, why does Trichet feel this must be done, & what benefit would derive.
    If there had been an EU Financial Ministry in review, would the little piggies all been hog-tired under sovereign debt and cruelly pricked by the use of nefarious financial products like CDS & derivatives?
    I think not.

  • rate this

    Comment number 15.

    I think once legal decision comes down re CDS/derivatives & the impact that this betting (for and) against sovereign debt rears its full Medusa Head, more Europeans will see the benefit of a EU Financial Ministry. Would Greece have been caught in derivative subterfuge had its budget been perused? How about Portugal?
    As long as we have nefarious banking activity, it must be guarded against.

  • rate this

    Comment number 14.

    Let the Brussels' despots bring Trichet's idea forward and we'll soon reach a tipping point where even our Vichy government ,under public pressure, will pull us out of this corrupt,undemocratic institution

  • rate this

    Comment number 13.

    Trichet's future: EU Finance Ministry would have the power to veto the budgetary plans of euro-zone member states in CERTAIN SITUATIONS. He emphasized that veto would only come after audit & counsel had failed. He wants balance between sovereignty & interdependence, particularly in exceptional situations, like battling against CDS/derivatives; both these played such a big role in Greek debt.

  • rate this

    Comment number 12.

    Consider the strains in the 19th century to maintain union that resulted in civil war, and the greatest loss of lives in American history. Europe knows the cost of nationalist rivalry. The central goal of European Union is peace. This must always remain foremost in the minds of its political leaders. Markets are not the bottom line. Peace must prevail through union.


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