A vision of the future of EMU. The speech given by the president of the European Central Bank on 2 June is an exception to the rule that you should never comment belatedly on a speech or declaration on the problems of the euro, because it will only remain relevant for a very short time. Somebody may be all doom and gloom one day only to change their mind a couple of days later, see positive developments or even juggle with the way their words were interpreted; and sometimes the words of the inimitable Paul Léautaud are particularly fitting: “There's no point giving our opinions today, because we all have different ones by tomorrow” (our translation throughout). The result is that the commentator who is late to the party ends up giving the impression of not having really grasped the situation.
These considerations, however, do not apply to the speech given by Jean-Claude Trichet in Aachen on 2 June. His objective far outstripped the reality: he gave his vision of the future of European integration, as the occasion - the ceremony to award the Charlemagne Prize, the winner joining the ranks of those who have created the history of Europe - was appropriate. Our bulletin 10392 gives an excellent summary of his text, which argued in favour of reinforcing the European institutional framework, by revising the Treaty; in particular, his suggestion to create a European finance minister, once the time is right, with the authority to veto national economic policy decisions, was picked up on throughout the press.
A highly positive reality, with an “E” to be shored up. Mr Trichet is not a dreamer, he does not think that this kind of development will come any time soon, it represents “the Europe that we will have, tomorrow or the day after”, when the EU is “a confederation of sovereign states of an entirely new kind”. It is not this long-term vision I plan to discuss today, but Mr Trichet's opinion of the situation in the field in which he has had, and still does have, direct responsibility. We can break down this opinion into three points: (a) economic and monetary union (EMU) “is an unprecedented achievement in the history of our sovereign nations, an objective to which generations of Europeans aspired”; (b) “EMU has brought growth, EMU has promoted trade, EMU has helped employment, EMU has brought price stability (…),EMU is a strong and credible currency, in which our citizens, investors and savers have steadfast trust”; (c) monetary union already exists, it's the “M in EMU; now it's the E in EMU, economic union, that we need to shore up”.
At last a positive view of the current phase of European integration - finally the emphasis is on the results achieved rather than on playing up the problems! This section is therefore not entirely on its own when it states that the current period will be seen by tomorrow's historians as a time of consolidation and progress towards the unification of Europe! Problems are inevitable, because the bar has been set very high, not forgetting that the Treaty contains several instruments which allow the most ambitious states to make progress among themselves. What leapt out of Mr Trichet's speech at me was the explicit reference to the letters E and M, in practice using the terminology of Jacques Delors, who, since the birth of the euro, has lamented the fact that the Union was limping, due to walking on only one leg, the monetary leg, with a non-existent economic leg. How many times has this section borrowed his metaphor!
In favour of a “qualitative leap” in European governance. Today, entry into the second plank of EMU is politically complete, even if the significance of this development has not been stressed or explained anywhere since it came into being. It is colossal and Mr Trichet highlighted this when he concluded: “the experience acquired over the last twelve and a half years shows that the euro has fully kept its promises”. Of course, serious imbalances have appeared: the member states “which have not respected the letter and the spirit of the rules have had problems, which have then, like a contagion, gone on to affect other countries of EMU”, and developing the instruments needed to correct the shortcomings has been a laborious process which is not yet over. It was at this point that Mr Trichet stressed the need to shore up the E of the EMU and called on all Community institutions and bodies to “set their ambition levels very high” in calling for a “qualitative leap in governance”. He recommends that the authorities of the eurozone be granted direct influence over the economic policy of the countries which are starting to get out of control, “going well beyond the reinforced monitoring currently being proposed”.
You may not fully subscribe to Jean-Claude Trichet's ideas: but it is what he said.
(F.R./transl.fl)