EU ministry of finance called for by Trichet
THE Eurozone will need a full-blown ministry of finance with power to veto national fiscal policies in future, according to ECB president Jean-Claude Trichet.
Speaking upon his receipt of the prestigious Charlemagne prize – which was awarded to the euro currency itself in 2002 – Trichet called for a “quantum leap” in European government. Such a leap would enable it to achieve “a new understanding in the way sovereignty is exerted”, he said. “Interdependence means that countries de facto do not have complete internal authority.”
He added that in order to sustain the euro, it will be necessary for “European authorities to have the right to veto some national economic policy decisions. The remit could include in particular major fiscal spending items and elements essential for the country’s competitiveness”.
He was speaking as the ECB, IMF and European Commission race to put together a new rescue plan for Greece, which is on the brink of bankruptcy.
The new European ministry of finance that Trichet envisages would preside over a “confederation of sovereign states” and would effectively be a super-regulator for the entire EU region. It would take on “all the typical responsibilities of the executive branches as regards the union’s integrated financial sector”, he said.
He suggested that a single ministry would be a natural extension of the Eurosystem – the official name for all of the EU’s governing apparatus. “In this union of tomorrow, or of the day after tomorrow, would it be too bold… to envisage a ministry of finance of the union?” he asked.
He added that the creation of a beefed-up EU government in charge of enforcing the stability and growth pact – in which a country’s deficit must not exceed three per cent of GDP – is justified because “countries that abide by the rules of the single currency can thrive and prosper”.
Trichet also claimed that his vision runs in a tradition that includes Erasmus, William Penn, Immanuel Kant, Victor Hugo and Robert Schuman. And he revealed that the ECB had based its actions during the past year on the thoughts of Max Weber.