European Central Bank president Jean Claude Trichet has suggested the European Union should create a European finance ministry to oversee fiscal and competitiveness policies across the EU.
In his acceptance speech in Germany last week for the Charlemagne Prize, an award that honours contributions to European unity, Trichet said a European finance ministry could have the power to veto some national economic policy decisions in EU countries that are experiencing “financial difficulties”. 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?
“It would not necessarily be a ministry of finance that administers a large federal budget but a ministry of finance that would exert direct responsibilities.”
Trichet also dismissed suggestions the euro was in trouble.
He said: “The euro is a solid and credible currency, trusted by our fellow citizens, investors and savers. There is no crisis of the euro.”
MAC Consulting chief executive Mark Chilton says: “There is an economic argument in favour of creating a European finance ministry but it would mean giving up so much sovereignty.
“There are already riots in the streets in Greece in reaction to all the cutbacks that they are facing. Can you imagine how much worse that would be if it was being imposed from outside Greece?”