3.6.2011
By Simon Miller
The president of the European Central Bank Jean-Claude Trichet has called for a ministry of finance which could intervene in national economic affairs.
Speaking at a ceremony to receive the Karlspreis 2011 award yesterday, Trichet said that in the context of greater European Union in the future, it would be necessary to have a finance ministry to oversee the integrated financial sector and a full integration of financial services.
He asked: “In this Union of tomorrow, or of the day after tomorrow, 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?”
Commenting on the current crisis, Trichet said that countries that have not lived up to fiscal expectations gave experienced difficulties and contagion has hit other EMU countries
“Strengthening the rules to prevent unsound policies is therefore an urgent priority, It is the means to allow all countries to reap the full benefits of the single currency, And it prohibits individual countries from pursuing policies that harm themselves and the euro area as a whole,” he said.
In the medium term, Tirchet expected the EU to take control of a trouble country’s economic policies – “a direct influence, well over and above the reinforce surveillance that is presently envisaged”.
He thought that it should possibly be compulsory for European authorities to take decisions applicable in the economy concerned.
Trichet said: “One way this could be imagined is 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.”
The radical call is likely to annoy the UK government which has resisted greater integration with the EU and has consistently claimed that fiscal policy remained in the sovereignty of the country.
In his speech, Trichet claimed that the current generation want to know how the EU works.
He commented: “In all domains this calls for continuing to strengthen Europe’s institutional framework. In the economic and financial fields it demands to reinforce in a decisive way the institutions of the economic and monetary union.”
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