The outgoing president of the European Central Bank called for changes yesterday to the EU treaty to rein in countries whose policies were threatening to imperil the entire bloc, as European leaders faced pressure to solve the sovereign debt crisis.
Jean-Claude Trichet said the treaty should be changed to stop member states straying from common norms, implying the need for a closer union under which decisions could be imposed on errant countries. "In my view it is necessary to change the treaty to prevent one member state from straying and creating problems for all the others," he said. "To do this, one even needs to be able to impose decisions."
The Continent's top monetary policymaker, who will hand over the reins of the ECB to Italy's Mario Draghi at the end of this month, added that the eurozone's debt problems had come about because some members had not kept a sufficiently tight leash on their finances.
"We don't have a federal budget, we don't have a political federation so we have to fully respect the constraints and the mutual supervision rules that exist in the eurozone," Mr Trichet said in an interview on French radio.
"It is the case that in Europe we have a bigger problem than others and this is a problem of supervision and governance within the eurozone."
He did, however, add that even without a new treaty, changes to the current set of rules would be better applied in light of the crisis. "I think that the lesson of the cost of negligence, of the cost of lax management, is sufficiently potent that in future, rules ... will be followed much more strictly," he said.
The comments came after G20 finance ministers and central bankers stepped up the pressure on European leaders to solve the crisis. After meeting in Paris at the weekend, they said they expected the EU summit on 23 October should "decisively address the current challenges through a comprehensive plan". Highlighting the worries, the Japanese Finance minister, Jun Azumi, warned that if left unchecked, the crisis in Europe could affect growth in emerging markets.Reuse content