SLOVAKIA and other small countries must never again be allowed to defy the will of the European Commission on crucial financial initiatives, Jean-Claude Trichet, outgoing president of the European Central Bank (ECB), said yesterday, preparing the way for yet another power grab by Brussels bureaucrats.
“It is necessary to change the treaty to prevent one member state from straying and creating problems for all the others,” he told French radio Europe 1. “One needs to be able to impose decisions.”
As well as lamenting the lack of “political federation” which meant every Eurozone country had to individually approve the expanded European Financial Stability Fund (EFSF), Trichet (pictured right) also attacked countries including Greece for failing to comply with previous agreements.
“I think that the lesson of the cost of negligence, of the cost of lax management is sufficiently potent that in future the rules - which have also just been reinforced will be followed much more strictly,” he said.
Trichet, who steps down at the end of this month, made the comments the day after G20 finance ministers called on Eurozone leaders to draw up a decisive plan to deal with the on-going sovereign debt crisis.
Last week saw the possibility of the EFSF’s extension being vetoed by Slovakia’s parliament – though the measure found approval at a second vote, bringing down the government in the process.
Other countries – most notably Greece, but also others including Italy and even Germany – have long ignored budget deficit limits.
G20 MEETING: WHAT HAPPENED IN PARIS
● Finance ministers from non-Eurozone G20 nations issued a statement urging decisive action from the Eurozone leaders at their summit next weekend, to cover Greece’s crisis, risks of contagion and Europe’s wobbling banks.
● The group urged Eurozone governments “to maximize the impact of the EFSF in order to address contagion.”
● Not all of the promises come from the Eurozone side. Countries including Britain said they would be prepared to pay more into the IMF’s bailout pot – as long as it was remained available for any troubled nation, not just those in the Eurozone. Estimates suggest up to €2 trillion may be required.
● Help for banks as well as governments was covered. The G20 ministers said they wanted concrete details on how banks would be recapitalised.
● French minister Francois Baroin chaired the meeting and assured his non-Eurozone counterparts that negotiations with Germany on how much of a haircut to impose on Greek debt was well underway.