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, "...giving 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.

'Interference'

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
    0

    Comment number 51.

    Somewhat off topic, but it seems "hot" to me - EU sovereign debt & restructuring. If Greek bond maturities offered in “soft” or voluntary DEBT RESTRUCTURING, CDS SWAPPERS would be casualties. Policymakers state move would undermine value of derivatives; restructuring is not a “credit event”. This means CDS protection buyers would receive no recompense (neither interest nor principal).

  • rate this
    +1

    Comment number 50.

    Trichet should count his blessings that he is leaving the ECB now , before it is bankrupt . Where democratic representation has failed in the EU , people power has taken over , general strikes and mass demonstrations . No outside administration can ammend Greece's finances while the people refuse to cooperate .
    A political union without referenda would lead to civil war .

  • rate this
    0

    Comment number 49.

    Let's get real. Some of the views and opinions here are plainly biased and unrealistically exaggerated (i.e. "Democracy RIP").

    (Continued Next Post)

  • rate this
    0

    Comment number 48.

    Democracy is still a part of the European way and no government or voting individual would be willing to relinquish complete control - as some may like you to believe. At present it's important to acknowledge that the major concerns of many Europeans relate to factors like the economy, employment and standard of living. (Continued...)

  • rate this
    0

    Comment number 47.

    Mind you, the conditions of this economic situation were contributed to -- in no small measure -- by many of the supposedly enlightened "democracies" of the world. (Continued Next Post)

  • rate this
    0

    Comment number 46.

    Right now, Europe needs strong leadership to overcome its many problems. Perhaps a centralised view that is sensitive to the entire European situation would help to address these problems without redundancy and with effective transnational co-ordination/collaboration in a timely manner as demanded by the people.

  • rate this
    -1

    Comment number 45.

    Also, the notion of these people "living like Kings" at the taxpayers' expense may have some merit; but at the very least they are 'actively' working for their pay and do have a good degree of accountability - unlike, for example, the British Monarchy.

  • rate this
    0

    Comment number 44.

    I think this is evidenced enough by the need for national bail-outs, the widespread protests regarding work and pay cuts along with the general resentment over on-going "austerity measures". Keeping this in mind, maybe Europeans *should* be asking themselves just how valuable a blind commitment to *absolute democracy* will be when these fundamental aspects are in such disarray. (Continued...)

  • rate this
    0

    Comment number 43.

    40 powermeer writes:
    "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"
    -------------
    Times report 4 June: "Mr Mladic gave a left-handed salute ..as his right arm hung limp at his side."
    ----------
    You did know that in a mirror reflection right becomes left?



  • rate this
    -2

    Comment number 42.

    39Oh really?When an individual, the PM of the UK has the power to capriciously sign a foreign treaty, the Lisbon Treaty for example that cedes some of his entire nation's sovereignty without approvall of his rubber stamp parliament, without even a debate let alone a referendum, there is no democracy.That there's no public outcry means they don't even understand what democracy is or what it's worth

  • rate this
    -1

    Comment number 41.

    Further to my last, if a group of people are utterly convinced that by sleeping in a pig sty full of filth and mud, they may reach eternal salvation, then what attractive force can urge them towards a soft bed and clean sheets? The EU is an idle dream conjured by old people with hereditary titles. They have been selling the same deal since the fall of the roman empire. Eternal Salvation. Buy now!

  • rate this
    +1

    Comment number 40.

    32.margaret howard
    3rd June 2011 - 19:35
    28 powermeer writes:
    "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"
    ---------------------
    No doubt you got the wrong arm.




    PM: Nope, margaret, although I suspect you'd prefer the left arm. :-)

  • rate this
    0

    Comment number 39.

    Marcus, the problem is not that Europeans do not know what democracy is. The problem, as far as I can deduce, is that too many Europeans think democracy is not important. Everyone knows the EU is deliberately anti-democratic. They just don't care. The two men in the picture are the greatest threat to liberty and progress in Europe, and yet they use public money to give each other medals. Europe.

  • rate this
    0

    Comment number 38.

    Democracy RIP. The mak slipped and the agenda was revealed. This crisis is truly the stuff of dreams, but the dreams of those who want complete control over our lives. In other words the dreams of suited psycopathology with a charming smile and persuasive rhetoric. RIP Orwell, you were right!!

  • rate this
    -1

    Comment number 37.

    Why are the 2 men in the photo smiling?Economies of the EU members are collapsing all around them.Euro they were so enthusiastic about ten years ago is an anchor that could take Europe to Davey Jones' Locker Social unrest could lead to anarchy.So why are they so happy? Because they have and will continue to live like kings at European taxpayer expense and there's' nothing anyone can do about it.

  • rate this
    -2

    Comment number 36.

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

    They never did.Whether autocrats ruling them sit in their capital or in Brussels, there has never been anything like real democracy in Europe. Europeans don't even know what real democracy is. They can delude themselves that because they have an elected parliament they have democracy, some Iranians imagine the same.

  • rate this
    0

    Comment number 35.

    When Greece joined the Euro the world knew they'd fudged the figures to allow entry. They decided to risk it, but to then continue ignoring the problems was a disaster waiting to happen. It might have taken over a decade to finally happen, but surely they knew they couldn't buck the market forever. It comes down to spineless politicians unwilling to make unpopular decisions.

  • rate this
    0

    Comment number 34.

    "In this vision citizens and voters don't appear to have a seat at the table." Trichet's proposal is for 2 phase approach to crises. First, pressure for countries to sort out their economy, as now; in the second, "euro area authorities" would have power to intervene-including the Council of Ministers. Aren't they elected?And where does he say that the "Finance Minister" would not be elected?

  • rate this
    0

    Comment number 33.

    @ # 12
    Peace above all else. The march towards the new-age serfdom comes not with goosesteps but within a carriage and robed in platitudes

    @ #1 Its Japanese or Chinese date notation. They share quite a number of characters and I am no expert.

  • rate this
    +1

    Comment number 32.

    28 powermeer writes:
    "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"
    ---------------------
    No doubt you got the wrong arm.

 

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