Friday, June 3, 2011

Trichet seeks single EU finance ministry to control all members' finances

Jean-Claude Trichet, president of the European Central Bank, has called on the European Union to take bolder steps towards controlling fiscal and economic policies, suggesting a long-term goal of establishing a European ministry of finance.

In a speech outlining his vision for the future of European economic and monetary union after the eurozone crisis, he called for medium-term measures that would allow EU members to veto national economic policy decisions if they endangered eurozone stability.

"There is no crisis of the euro," Mr Trichet declared in his capacity as chief guardian of the stability of the common European currency. While he avoided any detailed reference to negotiations for a new rescue package for Greece, he called for a drastic change in the system of economic governance in the eurozone, going beyond "the dialectics of surveillance, recommendations and sanctions".

He said "strengthening rules to prevent unsound policies" was an "urgent priority". The ECB had already called for a "quantum leap" in economic governance, and urged the European Parliament to reinforce the draft secondary legislation that is under negotiation with the Commission and the Council.

Speaking in Aachen, Germany, Mr Trichet called for a European Union that would be "a confederation of sovereign states of an entirely new type". (read more)